3i Infotech ups FY08 net profit, revenue guidance

3i Infotech ups FY08 net profit, revenue guidance

Mumbai: Software services firm 3i Infotech Ltd revised its net profit and revenue guidance for 2007/08 upwards on a robust order book and strong growth in its back-office business, a top official said on 25 October.

Net profit guidance was revised to Rs165 crore-Rs175 crore while revenue guidance was raised to Rs1150 crore-Rs1250 crore, executive director and chief financial officer Amar Chintopanth told Reuters.

“We decided to revise the guidance because of the strong trend in both our services and products business and also the strong order book we have," he said.

The earlier profit guidance was Rs145 crore-Rs155 crore and revenue guidance was Rs1000 crore-Rs1100 crore.

The company reported a 69% rise in standalone net profit for the quarter to September at Rs23.2 crore while revenues rose 50% to Rs120 crore. On a consolidated basis net profit rose 86% while revenues rose 91%.

At the end of the quarter, its order book stood at Rs738 crore, up from Rs670 at the end of the June quarter, Chintopanth said.

On the services side, its back-office operations have been fuelling growth.

“On the BPO side we are focussing on India where retail sector is seeing a boom. Our plan of acquiring small niche companies in this segment is also paying dividends," Chintopanth said.

At the end of the quarter back-office operations contributed 13% to revenues, up from around 7% in 2006/07, he said. By the end of the year the aim is to take it up to 15%, he added.

Margins in the back-office business are around 14-14.5%, he said.

Recently, the company raised $100 million through overseas convertible bonds, all of which has been earmarked for acquisitions.

On the product side, the capital market segment is driving the growth, contributing around 19% to the total revenue in the quarter.

“We are seeing a lot of growth in the banking, financial services and insurance sector and that is where our focus is," Chintopanth said.

Products contributed 47% to revenues while the remainder came from services, during the quarter.

Shares in 3i were trading down 0.2% at Rs140.50 in the Mumbai market after reaching a high of Rs144.50 in intra-day trades.