Cigniti Technologies Q2 net profit drops 29% to Rs 25 crore

IT firm Cigniti Technologies on Thursday posted a 29 percent decline in its consolidated net profit at Rs 25 crore for the second quarter ended September 2020, mainly on account of a one-time provisioning against an income tax order.

The company had logged a net profit of Rs 35.72 crore in the same quarter a year ago.

Commenting on results, Cigniti Technologies Chief Financial Officer Krishnan Venkatchary told PTI that the company's year-on-year profit has come down on account of one-time write-off of around Rs 8.95 crore which was necessitated for an income tax order received around transfer pricing for 4 years between 2015-2018 in the US.

"We have concluded the IT assessment scrutiny in the US. It will not affect us in coming quarters," Venkatchary said.

He said the company's EBITDA (earnings before interest, taxes, depreciation, and amortization) has moved up to 20 per cent from 16.5 per cent due to margin improving on account of reduced travel cost and increase in offshore business.

Venkatchary said that software export incentive scheme benefits were not received this year.

"The sunset time was March 2020. It has been extended for one year but not notified. We have not approved any income on that account in the coming year. After making all these provisions, we are very confident that we will be making better revenue and profits even during this pandemic time," he said.

Total income of Cigniti remained almost flat at Rs 224.12 crore during the reported period as compared to Rs 223.24 crore in the corresponding quarter of 2019-20.

Venkatchary said that income was around 3 per cent higher in US dollar terms.