Patni Computer Systems, which was recently acquired by Nasdaq-listed iGATE, has reported a loss of Rs 51.52 crore for the second-quarter ended June 30 in Indian GAAP largely due to high severance expenses and increase in staff costs.
In the corresponding quarter a year ago, the BSE-listed company had reported a net profit of Rs 146.7 crore.
Patni, which follows a January to December accounting calendar, saw its revenues for the period increased by 7.7 per cent to Rs 821.91 crore (Rs 762.8 crore).
After iGATE acquired a controlling stake in Patni this May, several top executives of the company had decided to move on including the Chief Executive Officer Mr Jeya Kumar.
According to news reports Chief Financial Officer Mr Surajeet Singh, Mr Ajay Chamania (head of product engineering), HR- head Mr Steve Correa and Mr Deepak Khosla (Head of Soth Asia) had also quit.
Integration process
As a result the company had to dish out ‘huge' severance packages to these employees. In the case of Mr Kumar, he was given a year's salary and stock options.
“Our integration process is well on track as we build the two companies together under our new vision. We expect our results to stabilise in 2012 after all the integration expenses and the accounting charges related to the acquisition have evened out,” said Mr Phaneesh Murthy, Chief Executive Officer and Managing Director, Patni, said.
headcount
During the quarter, the company generated cash flow of $16.5 million from operating activities and ended the quarter with $394 million in cash and short-term investments. The company's headcount stood at 18,372 as on June 30, 2011.
“With the front-end sales already integrated, I am happy that our joint go-to market strategy has been responding well among our customers and markets. Our focus is on building a platform for long-term growth and taking both the companies to the best in class earnings growth that iGATE has been able to achieve over the last three to five years,” said Mr Murthy.
The Patni scrip was down by 3.24 per cent to close at Rs 322.15 on the BSE today.