Hyderabad: Information technology (IT) firm Infotech Enterprises Ltd’s fiscal first-quarter net profit declined 18% on higher taxes and salary costs, the Hyderabad-based company said on Wednesday.
Profit after tax fell to Rs 26.85 crore in the three months ended 30 June from Rs 32.89 crore in the same period a year earlier, Infotech said in a statement released here.
The profit was notched up on a 37% increase in revenue to Rs346.67 crore from Rs 252.89 crore in the year-ago period.
Infotech’s net profit dropped because of higher taxes it had to pay after losing tax sops earlier given to IT firms that had operations in software technology parks, as well as annual increments it gave to its employees in the first quarter, chairman and managing director B.V.R. Mohan Reddy said.
“Though the net impact of salary increases was 280 bps (basis points), we were able to contain the overall impact on the company at 180 bps, both due to volume growth and managing margin levers,” Reddy said. One basis point is one-hundredth of a percentage point.
Infotech Enterprises has cash on hand of Rs 393 crore.
The company’s stock fell by 0.86% to Rs 138.85 on the Bombay Stock Exchange at the close of trading on Wednesday as the benchmark Sensex dropped 0.81% to 18,502.38.