Geometric Posts Bad Performance In Q3FY14
DSIJ Intelligence / 03 Feb 2014
Geometric, a company specialising in providing engineering solution and services in information technology (IT) sector, today (February 3, 2014) released its third quarter FY14 result. The company posted a decline in its financial performance on both sequential and on yearly basis in this quarter.
The operations revenue of the company dropped by 4% to Rs 275.3 crore on sequential basis. The drop in its revenue is primarily due to the fall in income from Engineering Services segment, which is the company's second largest revenue contributor (32%) and has decreased by 2.7%. Besides this, its Software Services and Products segment, also posted muted growth in Q3FY14 on Q-o-Q basis. The Software Services segment income stood at Rs 169.9 crore over Rs 170.6 crore in Q2FY14 and the income from Products segment came in at Rs 16.8 crore as compared to Rs 15.75 crore in last quarter in current financial year.
Based on its geographical exposure, the IT Company’s income shrunk by 5.3% to Rs 154 crore from its major revenue driver, USA (contributed 56% of revenue in Q3FY14). Apart from the Asia Pacific (contributed 4% of revenue) which showed muted performance, Geometrics’ operations has been affected in all of its geographical regions of operations (i.e. USA, Europe and India).
On operating expenses front, the company reported an increase of Rs 10.5 crore (increase of 4% Q-o-Q basis) to Rs 254 crore. The reason behind this is the increase in other expenses (by 20% to Rs 84.55 crore) during the quarter under consideration. Whereas, the employee expenses has reduced to Rs 170.3 crore as compared to Rs 173.7 crore in Q2FY14, due to the decrease in number of headcounts during December quarter.
Further, the decline in sales and rise in operating expenses resulted a drop in EBITDA by 51.5% to Rs 20.4 crore as compared to Rs 42.2 crore in Q2FY14. Also EBITDA margin halved to 7.43% on Q-o-Q basis. Net profit dropped by 54.6% to Rs 7.5 crore on sequential basis. Its Net profit margin reduced by 305 basis points to 2.74% during the same period.
With the Q3FY14 result announcement, the company also disclosed about its new deals signed during last quarter worth USD 9.25 million (about Rs 57.35 crore).
As a result of poor performance in Q3FY14, the company’s stock price closed down by 4.33% at Rs 94.95 in today’s trading session.
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