What’s With iGate?

Among the few companies to report poor half-yearly results, iGate Global Solutions has posted a year on year negative growth of 90.1% in PAT, even while asserting a 61.3% growth in operating revenues from the last year. The company, formerly known as Mascot Systems, has also posted a negative operating profit of 89.2% from last year. “We’ve not done well. Our operating margins have been bad due to a combination of high onsite content, low bill rates, certain costs that were incurred in the US and lower utilization rates. We will look to set this right in the next few quarters,” said the newly appointed CEO, Phaneesh Murthy. According to him, the company will involve itself in a huge restructuring program to achieve better results which will include a new sales team, a marketing and consulting front end and delivery consolidation into IT, BPO/BSP and contact

centre.

“We will also consciously look to increase our offshore share from its present 48% to 65% in the next three quarters. We will be relocating around 45 jobs from the US as we move our finance and accounting, IT&T and brand management and marketing efforts to work out of India,” said Murthy. Murthy asserted that the company’s three acquisitions of IT&T, Quintant and IdeaSpace, which cost it a total of Rs 100 crores, was also a reason for the bad show at the quarter and that the next few quarters will be spent in integration and consolidation of these bases. “As a part of the overall consolidation of the company, we will be looking to establish a single stock and a single vision. This stock will trade in two markets under its identities but will remain a single stock nevertheless.”

TEAM DQ