Computer consultancy Capgemini said first-half operating profit rose 49 percent, buoyed by Indian expansion, but the result barely met expectations and its shares led losses on a nervy French stock market.
Europe's top IT consultancy set out plans to strengthen its position as one of India's largest foreign IT players and targeted improved operating margins for 2007 and 2008. Chief Executive Paul Hermelin ruled out making large acquisitions in coming months as Capgemini would focus on integrating Indian acquisition Kanbay.
He also said Capgemini had had no contact with Indian software firm Infosys, as he sought to quash persistent bid speculation linking the two groups. "The priority is to show that the Kanbay acquisition worked well. In the meantime we may do small deals but no large acquisitions," he added.
Capgemini bought technology services group Kanbay earlier this year for $1.25 billion to speed up its growth in India and bolster its position in finance consulting and in North America.
Separately, British computer services firm Xansa Plc said on Friday it was in advanced talks regarding a take-over offer amid market speculation Capgemini could be behind the bid. But Hermelin denied Capgemini was involved. Meanwhile traders on the lookout for vulnerability in a weaker global stock market made Capgemini the biggest faller in France's CAC 40 index on Friday.
Capgemini's stock fell as much as 4.8 percent to 49.03 euros before steadying at 49.75 euros, down 3.4 percent and underperforming the European technology sector.
Capgemini's first-half operating profit rose to 269 million euros in the six months to June 30 from 181 million in the year-ago period. Capgemini's first-half operating margin rose to 6.1 percent from 4.8 percent in first-half 2006 and 5.8 percent in the full year 2006, driven by cost control and higher revenue. Net profit more than doubled to 168 million euros. Orders were 4.25 billion euros in the first half, and included 1.20 billion euros of outsourcing. Capgemini's workforce in India could exceed 20,000 people by the first quarter of 2008, Hermelin said.
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