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iGATE Corp. (NASDAQ:IGTE)

Q4 2007 Earnings Call

March 10, 2008 10:00 am ET

Executives

Sunil Wadhwani - Co-Chairman and Chief Executive Officer.

Michael Zugay - Chief Financial Officer.

Phaneesh Murthy - Chief Executive Officer of iGate Global Solutions.

Ramachandran Natesan - Global Solutions Chief Financial Officer.

Analysts

Brian Kinstlinger - Sidoti & Company

Tim Brown - Roth Capital Partners

John Maietta - Needham & Company

Vincent Colicchio - Noble Financial

Operator

Good day ladies and gentlemen and welcome to the iGate Corporation Q4 2007 earnings quarterly conference call. At this time all participants are in a listen only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) It’s now my pleasure to introduce your host Ms. Patricia Flora, Manager, Corporate Compliance for iGate. Thank you Ms. Flora, you may begin.

Patricia Flora

Thank you operator and welcome to iGate, 2007 fourth quarter conference call. If you’ve not yet received a copy of our earnings announcement, that can be obtained from our website at www.igatecorp.com. With me on the call today are Sunil Wadhwani, iGATE’s Co-Chairman and Chief Executive Officer, Michael Zugay, iGate’s Chief Financial Officer, Phaneesh Murthy, Chief Executive Officer of iGate Global Solutions, our India based subsidy and Ramachandran Natesan, iGate Global Solutions Chief Financial Officer.

I would like to remind everyone that statements made during this call that are not historical facts, are forward-looking statements. These forward-looking statements include our financial, growth and liquidity projections as well as statements about our plans, strategies, intentions and beliefs concerning our business, cash flows, costs and the markets in which we operate. Without limiting the foregoing, the words "believes," "anticipates," "plan," "expects," "intends" and similar expressions are intended to identify certain forward-looking statements. These statements are based on information currently available us and we assume no obligation to update these statements as circumstances change. There are risks and uncertainties that could cause actual events to differ materially from these forward-looking statements including those listed in the cautionary language at the end of our news release. As a remainder we’ll not discuss further guidance during the quarter in one-on-one meetings or calls and we have no intention at this time of updating our guidance as circumstances change.

I will now turn the call over to Sunil.

Sunil Wadhwani

Thanks Patricia and thank you for joining us everyone. Good morning. As usual, I will open the call with some opening comments about our overview of financial results. Phaneesh will then provide more detailed about iGate Global Solutions or IGS our offshore solutions Company and Mike will then review some additional plan and financial highlights. We’ll then provide an update of our business outlook and then we’ll open the call up for your questions and all four of us Phaneesh, Ram, Mike and I will be happy to respond to any questions you might have.

We are very pleased to have achieved what we believe is significant and steady progress on key financial operational and strategic initiatives during the past quarter as well as for the entire year 2007. As we expected, our revenue and profit levels for 2007 significantly exceeded 2006 results and our success at IGS particularly enables the Company to embark upon several key strategic initiatives. I will discuss these important changes a little bit later in the call.

Looking first at revenues; our consolidated revenues for the fourth quarter increased to $79.6 million, that’s an increase of 6.7% from the same period last year and 4.6% from the sequential quarter. iGate Global Solutions or IGS did particularly well and their fourth quarter revenues reached an all-time high of $52.8 million, an increase of 11.3% from the same period last year and 6.6% compared with the sequential quarter. Looking at the overall year 2007, consolidated revenues increased 8.3% to $307.3 million and this revenue growth in 2007 was driven largely by a 17.2% increase in IGS revenues to $198.8 million compared with 2006.

Looking now at gross margins, consolidated gross margin for Q4 improved to 30.1% from 29% in the sequential quarter and from 28.1% in the same quarter last year. iGS’s gross profit margin for the fourth quarter increased 240 basis points compared to 34.9% -- I'm sorry, it went to 34.9% from 32.5% in the sequential quarter and from 30.7% in the same quarter last year, so a very significant increase. For the entire year 2007, our consolidated gross margin improved to 29% from 25.9% last year and this improvement was entirely due to the excellent performance at iGS.

Looking at net income, for the quarter, our net income was $4.9 million or $0.09 per diluted share, an increase from $0.08 per diluted share in the previous quarter. This year’s fourth quarter also included the unfavorable impact of $0.8 million for a corporate level restructuring charge.

For the entire year 2007, net income increased 79.1% to $15.6 million or $0.29 per diluted share compared with $8.7 million or $0.16 per diluted share in the prior year. Net income for both years included various one-time items as described in our press release. If you exclude these one-time items, net income increased very significantly from $5 million in 2006 to $18.3 million in 2007, so a substantial improvement.

And with that, I’d like to turn the call over to Phaneesh for a more detailed look at the performance at iGS. Phaneesh?

Phaneesh Murthy

Thank you Sunil and good morning to all of you. I think we had a pretty good quarter at iGS; good sequential revenue growth and excellent margin growth. I think our focus on increasing our gross margins, our focus on increasing the operating margin really paid very good dividend and as Sunil mentioned, we expanded our margins by about 240 basis points compared to the previous sequential quarter. This came about as a result of largely higher average realized rates, both on the onsite side and on the offshore side. That was the prime driver for the margin in addition of course to the growth in revenues.

Utilization rates stayed somewhat steady. We don’t anticipate more than a 100 basis points to 200 basis points movement on utilization rates now. We anticipate that will be kind of steady.

We added approximately 300 employees in the quarter and this is based on the projects that we have forecasted and that we have visibility into.

The last quarter also had three huge big tickets wins for us in terms of awards. We won the award from CNBC Watson Wyatt TV18 as the best IT and BPO Employer in India. That was huge for us -- I mean you know everybody in the industry participates and for us to win that award was really prestigious. We were rated Number 3 by the Dataquest-IDC survey among IT employers in India and we were rated Number 6 by Business Today- Mercer across all industries, not just in IT, across all industries in India. This has I think helped us build our brand tremendously in the employee segment and we believe that it will end up having a much more positive impact on retention and it will make attraction also a lot easier, so really very positive news I think from the last quarter in iGS.

If I look forward a little, the impact of the mortgage business to our revenues has come down dramatically. It’s 4% now are whereabouts and therefore it doesn’t really effect us one way or the other. We believe that the IT budget will remain flat to marginally up. We have not seen any sign of any slow down on IT spending due to the US economy and therefore consequently the demand for our services we think remains fairly strong. We have also continued to expand on some of our higher value added services. We have won a few good new ITops deals intermediate technology and operations deal and I think all of this is going to be helping us continue to drive margins up over the next few quarters. We expect the SG&A costs to rise in the near term due to Company’s restructuring initiatives, but we will manage this over the longer term. As we -- the cause of the compliants and those kinds of things is what we are talking about.

We expect to hire about a 1,000 to 1,200 people in the next year -- in the coming year and as I think we have always been talking about there is a seasonality impact on our margins side and the April, May, June is the weakest quarter on the margin front because of the annual salary increases which we do in April. So consequently just to sum up I think the market outlook for the services still remains positive. We are not seeing any slow down in terms of spending or anything like that. I think from our perspective we will continue to pursue adding new Global 2000 kind of clients. We will continue to pursue growing revenues and further improving both gross and net margins for the Company.

I will turn the call over to Mike for a brief overview on other matters. Mike?

Michael Zugay

Thanks Phaneesh. The Company continues to maintain a very strong balance sheet. At the end of the quarter we have $75 million in cash in short term investments and no outstanding borrowing. Our net cash flow from operations for the quarter was $15.4 million and a very significant and a very healthy $36.9 million year-to-date. This was our best year since 2001 from net cash flow from operations. Our DSO’s dropped to 61 days at the end of this December compared with 75 days at the end of the previous quarter and 67 days at the end of 2006.

Our depreciation and amortization expense was $2.7 million for the quarter and a $11 million for the entire year. Our capital expenditures were $1.4 million for the quarter and $8.5 million for the 2007 year. Our largest customer accounted for 17% of our consolidated fourth quarter revenues and our top five customers accounted for 42% of those revenues. At the end of the quarter, our world wide headcount was approximately 7,140 people and more than 90% of these individuals are billable consultants.

I will now turn the call back to Sunil.

Sunil Wadhwani

Thanks a lot Mike. As we had previously announced, we iGate Corp, are in the process of divesting our professional services business. We’ve announced that intention, our board of directors has made that decision and will be doing this divestiture either through a sale of the professional services business or a spin off of that business to iGate shareholders. Now you recall, we have also recently completed another very important initiative for our Company, which involve buying back the minority share holding in iGate Global Solutions, our offshore Company and delisting iGate Global Solutions iGS from the Indian stock exchanges. So when you take these two strategic initiatives together which is the delisting and the stock buy back and iGS, combined with the divestiture of the professional services business, basically what that gives us going forward in iGate Corp is a Company with a single focus that of being really one of the leading offshore services Companies and with a very clean capital structure with just one listing, stock exchange listing that being on NASDAQ here in the US.

So we believe that these changes again culminating in a company with one business, a clean capital structure and one listing, we believe that these will significantly increase shareholder value over the long term. We’re also very pleased to have announced recently the changes in our executive management and effective April 1, 2008 Phaneesh Moorthy will become the new CEO of the Company, iGate Corporation and Mr. Ramachandran will become the new Chief Financial Officer of the Company. Phaneesh, Ram and their team have done an outstanding job over the last five years in transforming and growing IGS and we are very confident that this team will lead our Company to much future success. We’d also like at this stage to say a very special thank you to Mike Zugay our CFO who has been with the Company for many, many years for his long term and dedicated service to the Company. With that let’s open up the call to your questions. Operator?

Question-and-Answer Session

Operator

Our first question comes from the line of Brian Kinstlinger with Sidoti & Company. Please proceed with your question.

Brian Kinstlinger - Sidoti & Company

Good. First question I want to ask is about as you see the business as going forward and you divest the staffing business, may be I believe you can take a stab or whoever can take a stab at the corporate overhead and how it quite -- each of the two businesses and until you divest staffing business how will it be reported?

Sunil Wadhwani

Let me take a stab at that, Brian. Our corporate overhead at the moment when you exclude the clinical trials business that’s in there, really is in three separate buckets and as we see things going forward there is some of what remains is going to disappear completely because of the changes that we are making. The other two pieces at best guess right now we think that less than 50% of what remains will go to the iGS segment and another 50% of costs will flow to the iPS segment when they are on their own.

Brian Kinstlinger - Sidoti & Company

And so when you are talking about that 50% of the $10.4 million that was reported it, in SG&A, is that the right number I'm looking at?

Sunil Wadhwani

No, no; of that $10.4 million in SG&A, we have about 2.4 of that related to the clinical trial start-up. So we are really looking at corporate overhead in any given quarter fluctuating between $8 million and $8.5 million. So my comment about less than half going to iGS and less than half going to iPS and some of the remainder disappearing pertains to that $8.5 million, not the $10.4 million.

Brian Kinstlinger - Sidoti & Company

Great understood and so for, I don’t know, the management team going forward wants to answer this or the one that’s going to be departing -- clinical trial business clearly that’s an unprofitable business; how -- that’s something that you expect going forward will be part of the iGS business or is that something going forward you will look at divesting as well?

Phaneesh Murthy

No Brian. That is in the process of being divested as we speak and we expect that to be done fairly shortly. We haven’t made any announcement only because that business hasn’t been material relative to the overall operations but that’s being divested as we speak.

Brian Kinstlinger - Sidoti & Company

That great. I mean it would be material, the negative side otherwise.

Phaneesh Murthy

Yes, correct.

Brian Kinstlinger - Sidoti & Company

Okay. Going forward, I wanted to ask about the cash on hand today. I think that you spent a big chunk to acquire the minority shares. What’s the balance sheet as of the end of January or the end of -- I mean at the end of February or where you stand today, if you could help us out.

Sunil Wadhwani

Yeah Brian, what we’ve done so far at the end of December, the reporting period is we spent over $47 million to buy back shares. Of that $47 million, $42 million of that was used and $5 million is still sitting in an escrow account at the end of December to be used going forward in 2008. So if you take a look at our balance sheet, I think it’s in pre-said assets you will see about a $5 million increase there over previous quarters and that’s because it’s been over 47, we have used 42 and 5 is the earmark especially for -- that continuing to buy back the shares as tendered.

Brian Kinstlinger - Sidoti & Company

Right.

Sunil Wadhwani

Now, running that forward, till today we’ve actually spent over about $68 million in cash. We had initially estimated that that cost was going to be about $77 million. So one of the things that was an unknown at the time when we made that announcement was the strike price that the Company would receive based on the employees on their vested shares having to pay the Company and only netting the difference in the vested shares and that looks like it shook out at about $5 million. So our original estimate of 77 was a little high, I think we are closer to the 72 of which as of today, we’ve spent over 68. I hope that puts that in perspective for you.

Brian Kinstlinger - Sidoti & Company

It certainly helps. Phaneesh the number -- you mentioned that press release eight new global clients and I guess when I tracked what you have been seeing in each of the last quarters I had in the last two quarters, three quarters ’02 and ’01, but then you make a statement, I think you only added one for the quarter. Can you just help me out reconciling that and those eight new clients for the year, they are the main drivers of ’08 growth or ’09 growth in your view?

Operator

Excuse me this is the operator. The line of Phanessh’s, his line has dropped off, he will be joining us shortly.

Brian Kinstlinger - Sidoti & Company

Great, well Ram may be can you answer that question for us.

Ramachandran Natesan

Yes I will. Basically we believe those new clients that we have added would have the impact in the later part of 2008. Substantive impact will come from possibly Q2 onwards. Now, I am not sure where this, the number you have.

Brian Kinstlinger - Sidoti & Company

Right

Ramachandran Natesan

The eight numbers that is coming from but we will try and reconcile and send it over to you and basically we believe that from the new customers that we have added our height of revenue would grow from Q2.

Brian Kinstlinger - Sidoti & Company

Right; am I wrong? In the press release it says you added eight new global 2000 companies right, as clients this year.

Sunil Wadhwani

That was three in the last quarter.

Brian Kinstlinger - Sidoti & Company

Three in the last quarter; okay and I only had three prior to that for the year. Do I just have my data incorrect and may be you need to send me quarter-by-quarter what happened.

Michael Zugay

Yeah, Brian we can do that. I think the fourth quarters back was the largest one. I think we had four and then four, one, two and one something along those lines.

Brian Kinstlinger - Sidoti & Company

Okay. For some reasons I did -- on the four, that’s a big mistake, thank you. The -- I have two more questions and I will get back in the queue because I have a couple of more. The first one on the net new adds finished, can you give us the average experience per year. Are most of those college grads and where you are right now compared to where you are last year with the average sort of experience of your employee base?

Sunil Wadhwani

I think most of these 300 new net were college grads. These are trainee batches that we had schedule which are coming in, so most of them are college graduates, yes. I think the average years of experience of the Company continues to be managed to an optimal level. As you know we brought it down from about 5.9 years three years ago to 3.9 years now to the current year -- our years of experience turn to 3.9 years.

Brian Kinstlinger - Sidoti & Company

And what did you say it was last year?

Sunil Wadhwani

Three years ago it was 5.9 years.

Brian Kinstlinger - Sidoti & Company

Three years ago?

Sunil Wadhwani

Yeah.

Brian Kinstlinger - Sidoti & Company

Great, and so when I am looking at modeling your Company, I think on your -- on the iGS term was called -- you had mentioned and may be it was last quarter, 5% sequential growth for a couple of quarters. Do you still feel that comfort because it sounded like you don’t think the US economy is impacting it, I am curious about that and where you are at the gross margin, is that where you will start the year and obviously we know what will happen with wage increases, but are you building off that fourth quarter numbers. There wasn’t anything one time in there, was there?

Sunil Wadhwani

No. So the quarter ending March. Yes just to re-trait that we still feel that we are comfortable at the 5% growth on revenue sequentially. We had a gross margin of 34.9% in the quarter ending December. Traditionally if you look at our pattern what happens is that the gross margin is lowest in Q2, calendar Q2 which is the April, May, June quarter and then builds upwards all the way through March and then it falls, but if you look at the gross margin on a year-on-year basis and the net margin on a year-on-year basis you’ll find a fairly nice improvement.

Brian Kinstlinger - Sidoti & Company

And is 250 points a fair assumption in March to June, generally what happens?

Sunil Wadhwani

March to June, I think it depends on the salaries.

Brian Kinstlinger - Sidoti & Company

And the volume…

Sunil Wadhwani

Yeah -- no, I mean it really depends. I think it depends on two factors. For us I think one of them is that we have increased our off shore content broadly over time, so it has a slightly higher impact. The second thing is we really need to figure out what the salary percentage is going to be this year because everybody is trying to figure out where exactly the market will end up and none of the companies have actually made a decision yet.

Brian Kinstlinger - Sidoti & Company

Right, okay. Thank you.

Operator

Our next question comes from the line of Tim Brown with Roth Capital Partners. Please proceed with your question.

Tim Brown - Roth Capital Partners

Hi good morning. It’s on the IPS segment, just had a couple of questions and just wondering if you could go through with us with your criteria, it’s going to be in terms of whether you sell that business or if you would spend them off to share holders and then you could go into maybe a little bit of valuation to the extent that you can and how you value the business.

Sunil Wadhwani

Sure, in terms Tim of how the decision is made, basically this has to be looked at from the view point of iGate Corp and whichever path gives the IGate share holders greater value is the path we’ll go down. We have retained the Blue Chip Investment Bank to assist us in the process. They are gathering all the data and doing all of the things that the banks do. So, I’m not sure I could tell you right now which of these paths looks more probable, but we are pursuing both very seriously. In terms of valuations, you probably know as well as anyone can know what the valuations are for staffing companies out there. They have come down fairly substantially over the last, I’d say three or four months because of this the increasing economic down turn in the US, this talk of potential recession, so more staffing companies outside have seen the multiples come down quite substantially, virtually all of them are creating a 52 week close. Many of them had to -- several of them missed their December guidance, many of them have had to revise the 2008 guidance downwards, so all of those factors obviously hurt valuation, but it’s something that we will do a proper foot scale process and then see where we end up.

Tim Brown - Roth Capital Partners

And just in terms of timing, I mean you said 2008 that….

Sunil Wadhwani

Yes, I would suspect whichever way we go, we will see something done in the summer.

Tim Brown - Roth Capital Partners

Okay.

Sunil Wadhwani

So I am guessing by sometime July, plus or minus a month.

Tim Brown - Roth Capital Partners

Okay and then seeing all this on IPS, what have you seen so far in 2008. Have you seen the demand drop off substantially, noticeably?

Sunil Wadhwani

No, it continues to decline. It started getting soft I’d say mid 2007 and it continues to get softer but it hasn’t fallen off a cliff, so business is still there but just the pace of demand has definitely dipped and I think all the companies are seeing the same thing.

Tim Brown - Roth Capital Partners

Yeah okay and then I just have a question I guess for Mike. On the clinical trials that you are going to divest, is that something where you expect to take a gain or a loss or is there anything material there?

Michael Zugay

There are nothing material whatsoever I think from a book standpoint there might be a slight gain, from a tax standpoint there might be a slight loss but nothing material whatsoever not even close to material.

Tim Brown - Roth Capital Partners

Okay and what’s the CapEx outlook for 2008?

Phaneesh Murthy

Bulk of our capital -- This is Phaneesh. Bulk of our CapEx is going to be in our campus in Whitefield and we expect to spend over the next 30 months roughly about $25 million.

Tim Brown - Roth Capital Partners

You said over the next 13 months?

Phaneesh Murthy

30.

Tim Brown - Roth Capital Partners

Oh 30. So that’s about 10 million a year. More or less where you are at in 2007.

Sunil Wadhwani

I would say so, yeah.

Tim Brown - Roth Capital Partners

Okay. Great and that’s all my questions. Thanks guys.

Sunil Wadhwani

Thank you Tim.

Operator

Our next question comes from the line of Vincent Colicchio with Noble Financial. Please proceed with your question.

Vincent Colicchio - Noble Financial

Business mix obviously is changing to your advantage on the bill rate side. How is it changing in terms of overall mix in terms of services?

Phaneesh Murthy

I think we continue to focus on higher margins services. The -- Ram mentioned that we have won a few good ITops deals. These are all transaction price and typically we anticipate that they will give us higher margins than the dollars for our kind of pricing. In addition as the billed out of the Company and the references to the Company become stronger we are able to acquire new customers at slightly higher price points. So all-in-all we anticipate that even with the same set of services we’ll probably increase average realized rate and margins will get enhanced as we offer more and more ITops work.

Vincent Colicchio - Noble Financial

What industries are you working for in the ITops side?

Phaneesh Murthy

Primarily the banking and insurance verticals.

Vincent Colicchio - Noble Financial

Is there anything in asset management, in terms of asset management?

Phaneesh Murthy

We are doing -- we are starting some work in the reconciliations area but nothing in assets management yet.

Vincent Colicchio - Noble Financial

And in terms of contracts that are up for renewal what sort of bill rate increases did you see in the quarter?

Phaneesh Murthy

Contracts which have come up for renewal, we have seen roughly about 2% to 3% increases in bill rates.

Vincent Colicchio - Noble Financial

Going forward into 2008, is there a number you would like to put out there in terms of how many global 2000 clients you think you could add on a quarterly basis?

Ramachandran Natesan

No, not a specific number but I think clearly you know we have been kind of tottering at about that fee level for some time now and I am very confident that we will go north of that starting from this quarter itself.

Vincent Colicchio - Noble Financial

It sounds like you’ve done a better job on the businesses development side. Can you give us some color there? Has there been a big changeover in terms of personnel within the sales force, what’s going on?

Sunil Wadhwani

About six months ago, we have brought in a new head of sales, a person who worked with me closely when both of us were at Infosys and I’ve brought him in to head the sales effort of the Company and he is actually very strong on acquiring new clients and I think even in Infosys he was extremely strong at that. He was working in a couple of other companies, most recently he was the president of Hexaware’s North American division when Hexaware also had a good track record of acquiring new customers and I think that’s the primary reason why we brought him onboard and he has already started making significant changes in the culture of the Company.

Vincent Colicchio - Noble Financial

Alright. Thanks a lot.

Sunil Wadhwani

Thank you.

Operator

Our next question comes from the line of David Hines with Needham & Company. Please proceed with your questions.

John Maietta - Needham & Company

Yeah, thanks very much. It’s actually John Maietta from Needham. Phaneesh, with regard to some of these US based clients, have you seen some companies accelerate projects in terms of moving them from onsite to offshore given the -- kind of the economic environment in the US?

Phaneesh Murthy

Hi John. No I think we have seen no discernible change in behaviors yet.

John Maietta - Needham & Company

Okay.

Phaneesh Murthy

We are watching fairly closely. People talk about cost pressures, people are talking about things. However, spending has continued. We continue to believe that IT spending will be marginally up compared to the previous year or flat and not down as many others are thinking and I think just overall we are reasonably bullish on the IT spend side, so we have not seen any appreciable change in their behavior.

John Maietta - Needham & Company

Okay and just a second question I had was did you finish your fulfill round with regard to the 1,000 people or the 1,200 that you plan to bring on this year. Roughly, what percentage of those folks will be freshers versus experienced hires?

Ramachandran Natesan

We expect about -- at least about 60%, 60% to 70% would be freshers.

John Maietta - Needham & Company

Okay. Thanks very much Ram. Thanks there.

Sunil Wadhwani

Thank you.

Operator

We have a follow-up question from Brian Kinstlinger from Sidoti & Company.

Brian Kinstlinger - Sidoti & Company

Great thanks. Just because I wasn’t prepared about the clinical trials, could you -- Mike do you -- is it the Company’s intention is to discontinue that business in the March quarter, then when you the report numbers, I just don’t to understand how -- I'm not surprised.

Michael Zugay

We are not of sure of that yet Brian. We can't -- at this point in time, we just can't answer that one.

Brian Kinstlinger - Sidoti & Company

Okay. Ram, in terms of 2008, what would expect the tax rate to be and what was the tax rate of your segment or your iGS in 2007?

Ramachandran Natesan

For 2008, the tax rate, the effective rate for the iGS segment would be roughly about 14%.

Brian Kinstlinger - Sidoti & Company

Now, will that -- tell me how you set a refugee locations, I know you guys do a little bit more renting but tell me how your set up so that in 2009, 2010 is that going to slowly go up or will that remain constant for a while.

Sunil Wadhwani

Even in the year 2009, it would go up because of lots of tax holiday, but what we are doing is we are also moving into the area of special economic zones in two of our centers in India and that could also partly neutralized increase in taxes which otherwise would have kicked in. So by 2010 possibly we would come back to the 13%, 14% effective rates.

Brian Kinstlinger - Sidoti & Company

In terms of -- have you guys given a vertical breakdown, now that your more of a peer play of your segment in terms of for example financial services revenues versus other industries.

Sunil Wadhwani

No, we haven’t given the breakup of those revenues.

Brian Kinstlinger - Sidoti & Company

Can you give us a sense of how much of your business is financial services related?

Phaneesh Murthy

Yeah, maybe I can give you that roughly between 55% and 60% of our business comes from the financial service as well which well as includes banking, capital markets and insurance.

Brian Kinstlinger - Sidoti & Company

Right, and can you give us a sense on the GE deal, next is upper re-bid or renewal or re-contracting.

Sunil Wadhwani

On the GE bid is not up for renewal in 2008, it’s only after renewal in 2009 December.

Brian Kinstlinger - Sidoti & Company

Right, and do you have another 10% client now, of just your segment though it’s not there yet.

Michael Zugay

That’s very close, we do have another one.

Brian Kinstlinger - Sidoti & Company

Okay and is that contracts at all ready to be renegotiated or does have some time as well?

Sunil Wadhwani

Oh no that has plenty of time.

Brian Kinstlinger - Sidoti & Company

Thanks. Last question I have is for Sunil. Sunil you own a happy chunk of stock here, I think just over 25% and you are going to remain -- it sounds like a chairman. Do you plan to remain with that or as chairman you will continue your entire holdings? Any thoughts would be helpful.

Sunil Wadhwani

No, no. Plan to absolutely hold on to it. Brian I think with again the tremendous job that Phaneesh and Ram and their team have been doing and now with us being a pure play off shore services Company and one off, less than a handful is to get in the US, I think this tremendous opportunity for value growth and so both myself and the other co-founder of the Company Ashok Trivedi, both of us are very much committed to staying the course.

Brian Kinstlinger - Sidoti & Company

Thanks for your time guy.

Sunil Wadhwani

You are welcome. Are there questions or comments?

Operator

There are no questions in the queue at this time. (OPERATOR INSTRUCTIONS)

Sunil Wadhwani

Okay, well if there aren’t any further questions we would like to thank you all for joining our call today and Phaneesha and Ram would look forward to sharing the Company’s 2008 first quarter results with you in about six weeks. So thanks a lot.

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Source: iGate Corporation Q4 2007 Earnings Call Transcript
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