Patni Q3 beats street on product engineering boost

Patni Q3 beats street on product engineering boost

Mumbai: Mid-sized Indian software services firm Patni Computer Systems on Wednesday posted a better-than-expected quarterly profit on a boost from product engineering segment sales.

The segment, which accounted for 17% of Patni’s third-quarter sales, rose to Rs141 crore against Rs118 crore a year ago. The company, which caters to industries such as insurance, telecom, energies and utilities and retail, clocked consolidated net profit of Rs1.44 crore, a 14.3% drop compared with Rs169 crore a year ago.

A Reuters poll of brokerages forecast profit to drop 28.6% to Rs120 crore. Patni, which added 13 new clients in July-Sept, said its net sales rose 2.6% to Rs823 crore.

Small and mid-cap IT companies have been grappling with tepid demand, high attrition rates and a rise in expenses, resulting in strain on margins and reduced profitability for some.

The BSE and New York Stock Exchange-listed Patni forecast fourth-quarter net profit of $22.5 million to $23 million on a constant currency basis on revenue of $180 million to $181 million, it said in a statement.

Patni expects a mark-to-market foreign exchange gain of $1.5 million in the December quarter, but flagged the strongly appreciating rupee as an overall concern for the industry.

Patni’s larger peers, Infosys Technologies, Wipro and Tata Consultancy have also voiced concerns about a strong rupee crimping profits at India’s $60 billion software services sector, which gets more than half of its revenue from exports and counts costs in rupees.

At 10.44am, shares of Patni were trading down 0.17% at Rs464.45 in a weak Mumbai market.