R Systems Reports Record Revenues of Rs.59.36 crores in Q1 2007

Noida, India - April 28, 2007
"R Systems earned record quarterly revenues of Rs.59.36 crores in Q1 07, a growth of 35% YoY. The growth in revenues was all round in R Systems service offerings." said Rekhi Singh, Chairman and Managing Director. "We are pleased that we achieved our goal to return to profitability in the quarter, and to keep up the momentum we are aggressively working on a number of initiatives to enhance our performance."

"Our sales team established over 10 key customer relationships this quarter, while the global delivery system with 1,675 associates continued to deepen the relationship with existing customers maintaining our repeat business in excess of 90%." said Raj Swaminathan, COO of R Systems. "To mitigate the impact of Rupee’s appreciation on margins, our operational goal is to further improve utilization and price realization during the current year."

Cash and cash equivalents, including bank deposits, as on March 31, 2007 were Rs. 48.28 crores compared to Rs. 53.17 crores as on December 31, 2006. The decrease in cash and cash equivalents was mainly on account of capital expenditure for expansion of capacity and payment of deferred consideration for the acquisition of WebConverse, Inc.. Total shareholder funds as on March 31, 2007 was Rs. 130.29 crores compared to Rs. 128.23 crores as on December 31, 2006. The increase in shareholder funds was as a result Q1 2007 net earnings of Rs. 2.10 crores.

"Our operating performance improved QoQ, however it was still below our normalized level as a result of cost overrun on one project reported earlier, and losses in ECnet subsidiary. The cost over run ended in March and the plan to restore ECnet to profitability by increase in prices for managed services is under implementation." said O’Neil Nalavadi, Director Finance. "As we look into the future, we are concerned about the rapid appreciation of Rupee against US$. Our balance sheet continues to be very strong with cash and cash equivalent of Rs.48.28 crores."

R Systems ended March 31, 2007 with total technical count of 1,675 associates, a net addition of 74 during the quarter. After having successfully deployed CMMI, ISO 9001:2000, and ISO 27001:2005, R Systems has commenced People Capability Maturity Model ("PCMM") initiative to enhance our HR practices and invest in the continuous development and growth of our people in all our development centers in India. People Capability Maturity Model (PCMM) is a People Management Framework based on industry best practices.

Source : Equity Bulls

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