Companies & Sectors
iGATE targets $900 million revenue from iTOPS biz by 2017

iGate CEO Phaneesh Murthy said the company is looking at $3 billion revenues by 2017, from over $1 billion at present 

 
Tiruchirapalli (Tamil Nadu): IT company iGATE has said it is targetting $900 million revenues over the next five years from iTOPS (integrated Technology and Operations) business that will be the key growth driver for it in the coming years, reports PTI.
 
Overall, the US-based company is looking at $3 billion revenues by 2017, from over $1 billion at present, iGate CEO Phaneesh Murthy told PTI from Freemont, California.
 
"We are seeing increased acceptance of our outcome based model among both existing customers as well as the prospects that we are talking to. Currently, about 10% of our business comes from outcomes based model. We would like this to go up to 30% in five years," Murthy said.
 
He said iGate's intent is to achieve faster growth, with focus on signing large deals. "We are currently in the midst of two such large $100-million-plus deals and our target is to see a closure on at least one of these two deals this year".
 
On the earnings front, Murthy said he wanted iGATE to be the best earnings company in the industry in five years.
 
Asked about hiring for this year, given the slowdown in the industry, he said iGATE plans to recruit 3,000 persons this year in addition to its existing employee base of over 27,000.
 
So far this year, Manufacturing, Retail, Distribution and Logistics (MRDL) have been a key growth driver for iGATE. "We are seeing a lot of bump ups here in the MRDL space." 
 
On the scenario in BFSI (Banking, Financial Services, Insurance), the single biggest vertical for the Indian IT industry, he said he expects IT spending in the sector to pick up in the coming two quarters. BFSI has started a slow comeback in second quarter.
 
"My estimation is that the BFSI sector will recover by the end of the year," Murthy said.
 
When asked about Nasscom's projection of double digit growth for the IT industry this year, he reiterated his earlier stand of this year being single digit growth for the industry.
 
"For the industry to achieve double digit growth, companies have to post spectacular results in the last two quarters to offset slow growth in the first two quarters of this calendar year.
 
"I do not see that happening, especially given the coming elections in the US and consequent impact on outsourcing and with Europe showing no signs of recovery in the near future." 
 
He was more bullish on prospects for 2013.
 
"I expect the next year to be a recovery year for the US economy and as a result from an Indian IT industry point of view, next year would be a better year than 2012," he added.
 

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Oriental Bank of Commerce Q1 net profit up 10% to Rs391 crore

While OBC's total revenues increased 54% to Rs4695.5 crore, its NPAs also rose to about 3% from 2.1%

 
New Delhi: Oriental Bank of Commerce (OBC) on Monday reported 10.3% rise in net profit to Rs391.4 crore for the first quarter ended June 2012, reports PTI.
 
The public sector bank had posted a net profit of Rs354.7 crore for the first quarter (April-June) of the previous fiscal, OBC said in a BSE filing.
 
The total income of the bank increased by 54% to Rs4,695.5 crore from Rs3,920.3 crore in the corresponding year-ago period.
 
Interest income of the bank rose to Rs4,287.16 crore during the period under review from Rs3,596.5 crore in the same quarter of the previous fiscal.
 
OBC's gross non-performing assets (NPAs) increased to 2.97% during the quarter ended 30th June from 2.07% in the same quarter a year ago, it said.
 

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PM sets up panel to review taxation of IT, development centres

The PM said, there is still a need to address issues like the approach to taxation of Development Centres, tax treatment of 'onsite services' of domestic software companies and also the issue of finalising the Safe Harbour provisions

 
New Delhi: In yet another move to provide clarity on taxation issues, Prime Minister Manmohan Singh on Monday set up a committee to look into such matters pertaining to IT sector and research and development related activities, reports PTI.
 
The panel, headed by former Central Board of Direct Taxes (CBDT) chairman N Rangachary, will be in addition to the one set up to review the General Anti-Avoidance Rules (GAAR) provisions to address the concerns of foreign investors.
 
The new four-member committee will hold consultations with stakeholders and related government departments to finalise the approach to taxation of Development Centres and suggest appropriate measures.
 
"...it was felt that there is still a need to address some other issues relating to the taxation of the IT Sector such as the approach to taxation of Development Centres, tax treatment of 'onsite services' of domestic software firms, and also the issue of finalising the Safe Harbour provisions announced in Budget 2010," a PMO statement said.
 
Safe Harbour principles are international disclosure practices to check litigations in transfer pricing -- an accounting mechanism undertaken by MNCs to reduce tax liabilities.
 
"Safe Harbour provisions have the advantage of being a good risk mitigation measure, provide certainty to the tax payer," the statement said.
 
Earlier this month, the Prime Minister had set-up a panel headed by ICRIER chief and taxation expert Parthasarathi Shome to bring "greater clarity" and prepare a roadmap for GAAR by 30th September for its implementation.
 
Rangachary is also a member of the GAAR panel.
 

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