i-flex Q3 net profits rise

By : |January 20, 2007 0

By Sumeet Chatterjee

BANGALORE: Indian banking software maker i-flex solutions ltd. said on Friday its quarterly net profit rose 38 percent as it won more deals from banks for its products, but its shares fell on some market disappointment.

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The company, majority owned by U.S. business software firm Oracle Corp., expects more growth on earnings from licence fees for its products, chief financial officer Deepak Ghaisas told Reuters.

"So far we are concerned, the January-March quarter has always been the best quarter for us. The business momentum is pretty good," he said.

Shares in i-flex, which specialises in software for banks, insurance and financial services firms, ended 0.7 percent lower in a Mumbai market that fell 0.3 percent.

Its shares had risen 36 percent in the December quarter, outperforming a 20 percent rise in the IT sector index and an 11 percent gain in the main Mumbai index as Oracle sought to lift its stake in the company.

"The revenue growth is in line with expectations, but there is some disappointment at the profit level. The stock is overvalued and it is not reacting purely on the operational performance," an analyst at a Mumbai brokerage said.

Mumbai-based i-flex’s net profit for the three months ended Dec. 31 rose to 773 million rupees ($17.45 million) from 559 million reported a year ago.

Revenue rose 39 percent to 5.5 billion rupees.

The company, which counts Citigroup and HSBC among its clients, said it added 42 new customers in the quarter. It hired a gross 989 employees.

India has a booming software services industry serving a growing list of global firms, but Asia’s fourth-largest economy has been slow to throw up companies like i-flex that design software products. Other Indian product firms include telecoms software firm Subex Azure Ltd.

New international banking standards known as Basel II, which require banks to better track risks associated with lending, offer growth opportunities for i-flex, which has also expanded its products for insurance companies.

Reuters

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