Sasken’s overall revenue declined 7.3%QoQ to USD28.4mn due to lack of growth in IT services and decline in revenue of Products which had one time licensing fees in Q3FY11. Tax write backs helped in posting higher-than-expected PAT of Rs188mn and EPS of Rs6.6 (19%QoQ growth).

IT services revenue grew 0.7%, top clients decline Revenue declined

7.1%QoQ to Rs1,285mn due to dip in Products’ revenue and continued slowdown from top clients. IT services’ revenue grew 0.7%QoQ to Rs1,167mn. The EBITDA margin declined ~610bpsQoQ to 13.3%. Full year revenue declined 4.8%QoQ to Rs5,464mn. FY11 margin stood at 17.6% compared to 17.7% in FY10 and FY11 EPS was Rs25.9.

Products revenue decline

Products revenue declined ~60%QoQ to Rs87mn, after strong growth in Q3FY11 which had one time licensing sales in China.

Top clients ramp down continue to hurt growth

Top 5 clients’ revenue declined 12.9%QoQ and top 10 clients’ revenue declined 15.8%QoQ. Non-top 10 clients with 39% revenue contribution grew 23.4%QoQ. The company is trying to diversify and find opportunities in other segments. Automotive, utilities & industrial revenue contribution increased from 0.5% to 2.3% and its revenue grew 294%QoQ.

Attrition rate (annualised) came down but still very high; utilisation rate decline

The attrition rate (annualised) declined 340bpsQoQ to 31.4%. The utilisation rate also declined 20bpsQoQ to 62.1%. Added 376 employees on gross level to take the total headcount to 3,508. Most of the employee additions are laterals.