Syntel, Inc. (SYNT) has reported 35.35 percent plunge in profit for the quarter ended Dec. 31, 2016. The company has earned $47.99 million, or $0.57 a share in the quarter, compared with $74.24 million, or $0.88 a share for the same period last year.
Revenue during the quarter dropped 6.56 percent to $237.89 million from $254.58 million in the previous year period. Gross margin for the quarter contracted 168 basis points over the previous year period to 40.16 percent. Total expenses were 72.90 percent of quarterly revenues, up from 69.17 percent for the same period last year. That has resulted in a contraction of 373 basis points in operating margin to 27.10 percent.
Operating income for the quarter was $64.47 million, compared with $78.49 million in the previous year period.
"While we were impacted by challenges seen across several industries in the past year, Syntel has started 2017 with a focus on helping our clients build competitive differentiation and gain operational flexibility in an uncertain business climate," said Syntel Interim chief executive officer and President Rakesh Khanna. "Digital enablement and modernizing existing IT assets are increasingly becoming strategic priorities for our customers as they undergo enterprise-wide technology transformations."
For fiscal year 2017, Syntel forecasts revenue to be in the range of $900 million to $945 million. The company expects diluted earnings per share to be in the range of $1.75 to $2.00.
Working capital drops significantly
Syntel, Inc. has witnessed a decline in the working capital over the last year. It stood at $146.95 million as at Dec. 31, 2016, down 85.38 percent or $858.31 million from $1,005.26 million on Dec. 31, 2015. Current ratio was at 2.11 as on Dec. 31, 2016, down from 5.07 on Dec. 31, 2015.
Days sales outstanding went down to 23 days for the quarter compared with 25 days for the same period last year.
Debt increases substantially
Syntel, Inc. has witnessed an increase in total debt over the last one year. It stood at $499.88 million as on Dec. 31, 2016, up 284.58 percent or $369.90 million from $129.98 million on Dec. 31, 2015. Long-term debt stood at $478.62 million as on Dec. 31, 2016. Total debt was 109.97 percent of total assets as on Dec. 31, 2016, compared with 9.13 percent on Dec. 31, 2015.
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