Bengaluru: Nasdaq-listed software services exporter iGate Corp. reported a 14.8% rise in December quarter net profit, missing analyst expectations as gross margin narrowed.

A Bloomberg poll had estimated a net profit of $44 million on revenue of $330.2 million.

The company reported a fourth quarter net profit of $38 million, up from $33.1 million in the year-ago period.

Revenue rose 10.7% to $331.5 million from $299.3 million, while gross margin narrowed to 34.8% from 39.8% in the year-ago quarter.

Selling, general and administrative expenses rose about 13% to $57.9 million from $51.3 million in the year-ago period.

“We continue to see foreign exchange volatility that needs to be monitored and observed carefully," chief financial officer Sujit Sircar said in filing to the US Securities and Exchange Commission.

The amount of time and effort taken to deliver projects remains the same, but the cost of people working on them is more expensive, Greyhound Research analyst Sanchit Vir Gogia said in an email.

“The billing cost to the end customer is not increasing at the same pace as the cost. Hence, downward spiral impact on the overall profitability and margins. This is an industry trend," Gogia said.

Shares of iGate were down 21.51% at $33.25 at 8.30pm India time on the Nasdaq on Tuesday.

My Reads Logout