* First-quarter adjusted $0.45/share vs est. $0.41
* First-quarter revenue $302.2 mln vs est. $300.8 mln
* Shares rise as much as 13 pct
(Adds analyst comment, background; updates shares)
By Soham Chatterjee
April 10 IT services company iGate Corp
said revenue would grow faster in the second half of the year,
after it reported better-than-expected quarterly results due to
customer additions and higher revenue from Europe and financial
IGate shares rose as much as 13 percent in noon trading,
making the stock one of the top percentage gainers on the
The company, whose bigger rivals include Tata Consultancy
Services, Infosys Ltd and Cognizant Technology
Solutions Corp, added nine clients in the first
"Demand appears on track for strong second half - the
company added several new contracts in quarter, involving
software development, maintenance and testing services, and
continues to carry strong pipeline," Noble Financial Group
analyst Vincent Colicchio wrote in a note.
Banks and companies are raising their IT spending as the
global economy improves.
Exports by Indian IT companies are estimated to grow 13-15
percent in the year starting April, according to industry body
National Association of Software and Services Companies.
Infosys and Tata Consultancy, which are scheduled to report
results next week, have said they expected their main customers
in Europe and the United States to increase IT spending.
"We are experiencing sustained and broad-based growth
momentum across multiple service lines and geographies in our
top five clients," Chief Executive Ashok Vemuri said in a
conference call with analysts.
IGate said it expected the pricing environment to be "fairly
stable" this year.
Vemuri, an ex-Infosys executive who joined iGate in
September, has increased the company's focus on Europe,
mid-sized clients and industries such as banking and finance,
and insurance and retail. IGate also exited non-core markets
such as Latin America.
Vemuri said iGate was "tracking favorably" in talks to win
three large deals.
The company said it expected significant cost savings over
the coming quarters due to its efforts to refinance and repay
debt of $770 million.
Net income attributable to common shareholders fell to $23.3
million, or 29 cents per share, in the quarter ended March 31
from $27.1 million, or 34 cents per share, a year earlier.
Excluding items, the company earned 45 cents per share.
Analysts had expected earnings of 41 cents per share,
according to Thomson Reuters I/B/E/S.
Revenue rose 10 percent to $302.2 million, higher than the
average analyst estimate of $300.8 million.
Banking and financial services accounted for 23 percent of
iGate's total revenue, up from 22.2 percent a year earlier.
The contribution of Europe, the company's second largest
market, grew to 16.5 percent of total revenue from 12.7 percent.
The share of its largest market, North America, fell to 77.6
percent of total revenue from 80.3 percent.
IGate's gross margin declined to 37.5 percent in the quarter
from 39.8 percent a year earlier as the company invested more in
recruitments and software development.
The company net added 1,102 employees, ending the quarter
with 30,835 employees.
IGate's shares were up 12.6 percent at $37.39.
(Reporting by Soham Chatterjee in Bangalore; Editing by Kirti
Pandey and Prateek Chatterjee)