iGate profit rises 50% to $9 mn

Nasdaq-listed iGate signalled a possible uptick in the fortunes of mid-size IT firms with a 4.7% sequential rise in its revenue to $49 million and a 50% growth in net income to $9 million for the September 2009 quarter.

“IT budgets are likely to witness a 2-4% rise next year,” iGate CEO Phaneesh Murthy told ET. Mr Murthy said that the company also benefited from business from companies that were offshoring for the first time. “First time offshorers and growth from existing customers helped to drive up sequential volume and revenue,” he added.

iGate added six new customers during the quarter. The second quarter results of IT majors, Infosys Technologies and Tata Consultancy Services, have cheered investors that better times may be ahead for the software industry, which took a hit from the collapse of some of its large clients as well as recession in the key US and European markets. “A lot of volume growth is starting from financial services.

Our outcome-based models have also found greater adoption among companies after recession,” said Mr Murthy. For the nine months ended September 30, 2009, the company generated operating cash flows of $31.8 million.