Patni June qtr net falls; outlook muted

BANGALORE (Reuters) - India's Patni Computer Systems said its net profit fell 19.5 percent in the June quarter as wage rises crimped margins, and it forecast weak earnings amid a slowdown in the key United States market.

The mid-sized software services firm said on Thursday its net income in the September quarter was likely to be $18 million to $18.5 million, excluding foreign exchange gains or losses, down from $24.2 million in April-June under U.S. accounting rules.

"We are still finding the market ... to be slow predominantly because of the uncertainties as we all know," Surjeet Singh, Patni's chief financial and operations officer, told Reuters in a phone interview from its Mumbai headquarters.

"The visibility, therefore, is low into the growth profile in the short term. Hence we are guiding a flat quarter."

Shares in Patni, whose main clients include General Electric, Hitachi Ltd and British firm Carphone Warehouse, were down 0.4 percent at 234.90 rupees at 0640 GMT in the main Mumbai market that was down 0.6 percent.

The rupee's sharp gains against the dollar to its strongest level in more than two months weighed on shares of export-driven outsourcers on Thursday.

New York-listed Patni said consolidated net profit fell to 1.19 billion rupees ($28.4 million) from 1.48 billion in the year ago period under Indian accounting standards. Revenue rose 16 percent to 7.67 billion rupees.

Edelweiss Securities Ltd. had expected Patni to report net profit of 718 million rupees on revenue of 7.03 billion rupees.

Wage hikes during the quarter shaved 2 percent from margins, but the rupee's fall against the dollar of almost 7 percent in the quarter helped Patni boost its profit margins by a net of about 70 basis points from a quarter ago, Singh said.