• Posts revenues of Rs. 282.1 crores for the half year
• Posts profit after tax of Rs. 44.5 crores for the half year
• Announces the signing of an agreement to acquire Rhyme Systems, a GBP 15 million revenue software products company in UK
• Revises the guidance and expects to end the FY2007 with revenues between Rs. 620 crores to Rs. 640 crores and an EPS between Rs.16.0 to Rs.17.0
3i Infotech Limited, a global provider of IT solutions and services, today announced its operating results for the quarter ended September 30, 2006. The company also announced the signing of an agreement to acquire Rhyme Systems, a GBP 15 million revenue company in the UK with products for the lucrative asset management business in the UK.
Consolidated results for Quarter ended Sept. 30, 2006:
• Revenue from operations was Rs. 145.0 crores, a growth of 49% over the corresponding quarter in the previous year. Total revenue stood at Rs. 148.9 crores, as against Rs. 98.4 crores for the corresponding quarter in the previous year, registering a growth of 51%. On a sequential quarter basis, the revenue from operations grew by 12.9%.
• Profit before interest depreciation and tax (PBIDT) excluding other income grew by 71% to Rs. 34.1 crores, representing a PBIDT margin of 23.5% as against 20.5% for the corresponding quarter of the previous year. Including other income, the PBIDT margin stood at 25.5% for the quarter as against 21.3% for the corresponding quarter of the previous year. On the sequential quarter basis the PBIDT excluding other income grew by 16.2%.
• Profit after tax but before minority interest grew to Rs. 23.2 crores as against Rs. 13.3 crores for the corresponding quarter of the previous year. This represents a net margin of 15.6%, as against 13.6% in the corresponding quarter of the past year.
• Earnings per share (EPS) increased to Rs. 3.89 from Rs. 2.17 in the same quarter of the previous year.
Consolidated results for Half year ended Sept. 30, 2006:
• Revenue from operations was Rs. 273.5 crores, a growth of 47.2 % over the corresponding period of the previous year. Total revenue stood at Rs. 282.1 crores, as against Rs. 188.3 crores for the corresponding period of the previous year registering a growth of 49.8%.
• Profit before interest depreciation & tax (PBIDT) excluding other income grew by 73.3% to Rs. 63.4 crores as against Rs. 36.6 crores for the corresponding period of the previous year, representing a PBIDT margin of 23.2% as against 19.7 % for the corresponding period of the previous year. Including other income, the PBIDT margin stood at 25.5% for the half year as against 20.8% for corresponding period of the previous year.
• Profit after tax but before minority interest grew to Rs. 44.5 crores as against Rs. 23.6 crores for the corresponding period of the previous year. This represents a net margin of 15.8 %, as against 12.6% in the corresponding period of the previous year.
• Earnings per share (EPS) increased to Rs. 7.57 from Rs. 3.76 in the same period of the previous year.
Acquisition of Rhyme Systems:
The Company also today announced the signing of an agreement to acquire UK based asset management software company, Rhyme Systems.
Close on the heels of the Liverpool Victoria Insurance client win, the strategic acquisition of Rhyme Systems would complement 3i Infotech’s foray into UK’s lucrative BFSI market. Rhyme Systems, a profitable company with revenue of over 15 million pounds (equivalent to 28 million US dollars) has eight of the top eleven UK private wealth asset management companies as its clients. Some of the prestigious clients are Brewin Dolphin, Coutts RBS, Jupiter, M&G, Barclays and LCH Clearnet. Rhyme has two products for the asset management industry, namely, rhymeSIGHT & Quasar and three products for broking industry namely, Altimis, Fiscal and Arrow. These products enable asset, fund and private wealth managers to achieve optimum performance through market leading software solutions. These products operate in the manufacturing and operations elements of the asset management process, including portfolio management, investment administration, clearing, settlement, order management and accounting. This acquisition will be EPS accretive to 3i Infotech shareholders.
Commenting on the results and acquisition of Rhyme Systems, Mr. V. Srinivasan, Managing Director & CEO, 3i Infotech Limited, said, “This has been an exciting quarter for 3i Infotech both in terms of growth in revenue as well as expansion of our solution offerings with acquisition of G4 technologies and Rhyme Systems.”
He further added, “The Rhyme Systems acquisition is a move to further consolidate our position as a strong BFSI player. We, as a solution provider, constantly evaluate our BFSI offering vis-à-vis market demands and grow our business by filling the gaps in our range of products and solutions. As is evident from the company’s growth over the past years, we are now well poised to be amongst the most aggressive and fast growing companies globally.”
Commenting on this acquisition, Mr. Chris Potts, CEO, Rhyme Systems, said, “With 3i Infotech’s BFSI focus, our asset management software perfectly fits in and we look forward to jointly addressing the ever expanding BFSI segment, not just in UK but worldwide, through 3i Infotech’s wide range of offerings and regional reach.”
Dr. Ashok Jhunjhunwala to join the board of 3i Infotech Limited
Prof. Ashok Jhunjhunwala is Professor of the Department of Electrical Engineering, Indian Institute of Technology, Chennai, India and was department Chair till recently. He received his B. Tech degree from IIT, Kanpur, and his MS and PhD degrees from the University of Maine.
Dr. Ashok Jhunjhunwala has been awarded Padma Shri in the year 2002. He has been awarded Shanti Swarup Bhatnagar Award in 1998, Dr. Vikram Sarabhai Research Award for the year 1997, Millennium Medal at Indian Science Congress in the year 2000 and H. K. Firodia for "Excellence in Science & Technology" for the year 2002. He is a Fellow of INAE, INSA and NAS and a member of Prime Minister Scientific Advisory Committee.
Dr. Jhunjhunwala leads the Telecommunications and Computer Networks group (TeNeT) at IIT Madras. TeNeT group has incubated a number of technology companies, which work in partnership with TeNeT group to develop world-class Telecom Access products. The group has also incubated a company that aims to install and operate telephone and Internet in every village in India.
3i Infotech, which has a strategic focus on the Indian e-Governance and the managed services businesses, will gain substantially from the experience and knowledge of Dr. Jhunjhunwala in areas of networking and telecommunications.
Change in Audit Committee
• Mr. Bruce Kogut, Director, has been appointed as a Member of the Audit Committee
• Software products contributed 47% to the revenues for the quarter.
• Services contributed 53% to the revenues for the quarter
• The company acquired G4 Software Technologies (India) Limited, a specialist in the area of Payments solutions, Back Office Exception Processing solutions and Business Process Integration services in August 2006.
• In July 2006, the Company launched its global product development center in Kochi, Kerala
• The company launched its PREMIA Insurance Broking eXchange in support of the Insurance Brokers’ Association of India’s IT initiative
• The company also won the Government of Karnataka order to launch the state’s e-Governance initiative – “Nemmadi” - and bring government services to the citizens’ doorstep
• The company also made a foray into the UK software product market by signing its first insurance client in the country - Liverpool Victoria
• The company signed on Al Wathba Company for Central Services (AWCCS) - one of UAE’s leading fleet management organizations - for its ORION™ solution
• The company added four new million dollar clients
Awards and Accolades
• The company won the Asia Insurance Industry Award for Service Provider of the year the second consecutive year
• The company has also won the Frost & Sullivan Product Innovation Insurance software award 2006
Commenting on the occasion, Mr. Hari Padmanabhan, Deputy Managing Director, stated, “The quarter has been an eventful one for 3i Infotech, both in terms of new business as well as industry recognition. Winning the Asia Insurance Industry Award for the second year in a row was the highlight of the quarter as it reaffirmed our position in the market, as well as recognized our commitment to the insurance industry.
“Additionally, in September 2006, we launched the PREMIA Insurance Broking eXchange (IBX) in association with the Insurance Brokers’ Association of India which is a unique IT initiative for the Indian insurance industry and we are confident that projects such as these will drive our growth in global markets as well,” he added.