April 20: A hefty salary hike coupled by an increase in recruitment have taken a hit on the net profit of Hyderabad-based IT firm Infotech Enterprises for the financial year ending March 31, 2011. The company’s net profit was 18 per cent lower at Rs 139.7 crore for the financial year 2011, compared to Rs 170.8 crore in the previous fiscal. The operating margin too dipped to 15.2 per cent in FY11 over 21.9 per cent in FY10. “There are several factors reduced our margins,” says Mr B.V.R. Mohan Reddy, the chairman and managing director, told reporters after announcing the results.
“There has been fairly a large amount of salary increase this year. Second, we also had not planned for growth so we went ahead and recruited a lot of people in to the organisation,” Mr Reddy added. The employee cost in the fiscal ended, Mr Reddy said, grew by Rs 20 crore over the previous fiscal. The company had made a net addition of 771 employees in FY11. Despite a dip in profitability due to higher employee cost, the company plans ahead with its fresh hiring as it sees an improvement in the pricing scenario. “We are planning to add thousand more freshers.”