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Most IT firms' profit leaps to double-digit growth in Jan-Mar on rising demand

BABUL BARMAN | May 03, 2023 00:00:00

Most information technology (IT) companies posted double-digit profit growth in the third quarter ended in March as the demand for related services increased both in the local and global markets.

Of the 10 IT firms that disclosed quarterly earnings until now, eight showed a rise in income while profits of the two others fell year-on-year in January-March.

All the companies together secured Tk 393 million in profit in the January-March quarter, a 30 per cent jump from the same period a year ago.

They were at no risk of foreign exchange loss since they do not rely on imports on a regular basis. Hence, unlike manufacturing companies, the IT firms hardly bore any impact of the devaluation of the taka against the dollar.

Moreover, the government has taken some praiseworthy initiatives to help the IT Industry expand in the country, the result of which has become already visible, said EBL Securities.

For example, the government has been setting up hi-tech parks to ensure availability of internet connection and IT services all over the country.

The demand for software and IT-enabled services has been growing as many local business entities are moving towards automation.

The companies that provide IT-enabled services, such as internet and software services, showed an impressive growth riding on increased demand after the Covid-induced economic shocks, industry insiders said.

Amara Networks, one of the leading internet service providers, posted the highest 169 per cent year-on-year growth in profit to Tk 62.82 million for January-March.

Its revenue surged 24 per cent year-on-year to around Tk 300 million in the quarter while the cost of services rose only 7 per cent to Tk 177 million, compared to the same quarter a year ago.

Company secretary Syed Moniruzzaman said revenue had gone higher owing to good business tied to IT support, software services and sales of internet connections.

Genex Infosys, which provides information technology enabled services in local and global markets, posted the highest profit of Tk 85.85 million among the listed IT firms in the January-March quarter. The year-on-year profit growth was 9.22 per cent.

Md Jewel Rashed Sarker, chief financial officer (CFO) of the firm, said its IT business was forecast to triple in the next five years on the back of three deals signed in November last year.

IT Consultants, which provides services to major banks and financial institutions, posted 21 per cent profit growth to Tk 85 million for the latest quarter.

A company official, who spoke on condition of anonymity, said they had achieved revenue growth as operating expenses were lower compared to the previous year.

IT Consultants earned good revenue from government organisations and retailers during the quarter while operating one of the largest bank-driven independent ATM networks in Bangladesh.

ADN Telecom, which provides internet connectivity to various grades of customers through fiber, satellite and wireless solutions, posted 89 per cent profit growth in the third quarter to Tk 65.86 million.

Its revenue escalated by 34 per cent to Tk 339 million during the period for business expansion.

An official said the company, which raised Tk 570 million in 2019 through an IPO to scale up business, developed infrastructure and established a data centre. The move helped ADN Telecom boost revenue.

On the other hand, Aamra Technologies and Information Services saw their profits plunge 40 per cent and 32 per cent in the three months through March.

As the development of IT infrastructure has been facilitated by the government, the sector is drawing attention of foreign clients. In a favourable environment, many firms also went for broadening the horizon of their operations.

Genex Infosys signed an agreement with Whaleco Technology Limited, an Ireland-based company, to provide content moderation and data annotation services.

The sector has scope of growing further and needs to focus on creating skilled manpower, said Russell T Ahmed, president of the Bangladesh Association of Software and Information Services.

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