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Friday, Jan 23, 2004

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Satyam Q3 net up 25 pc at Rs 146 cr

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Hyderabad , Jan. 22

SATYAM Computer Services has posted net profit of Rs 145.86 crore on total income of Rs 691.14 crore for the third quarter ended December 2003 compared to net profit of Rs 116.73 crore and total income of Rs 521.50 crore for the corresponding previous period.

This reflects an increase of 24.95 per cent in net profit and 32.53 per cent in revenues.

The company has outperformed projection of software revenue between Rs 620 crore and Rs 630 crore for the period under review. Consequently, the company has revised its revenue forecast for the year to 31 per cent from 26-28 per cent announced earlier.

Mr B. Ramalinga Raju, Chairman, said that the company witnessed 10.73 per cent sequential revenue growth on the back of strong volume growth and price stability. Pricing has remained stable and new customer acquisitions are at marginally higher than current average prices.

Of the key cost drivers impacting profitability, salary cost increase was the primary reason for the margin decline. However, this was partially offset by cost containment, he said.

The EPS for the year is expected to be between Rs 17.77 and Rs 17.84, from Rs 16.95 guided earlier, inclusive of Rs 0.44 from sale of Sify stake.

For the last quarter of the year, income from software services is expected to be Rs 690-700 crore.

Income from software services is projected at Rs 2,511-2521 crore.

Nipuna posts loss

Nipuna Services, the company's BPO subsidiary, has recorded net loss of Rs 7.66 crore on revenue of Rs 3.49 crore during the third quarter. Nipuna, which has received funding from Intel and Olympus Capital, plans to invest more and enhance the seat capacity to thrice the current level of 297. It has added two new customers taking the total to eight.

While the company completed due diligence of the help desk, it is in the process of expanding the BPO operations. To meet the growing business demand, Nipuna plans to enhance seat capacity Hyderabad by 300 and create another facility in Bangalore with 300 seats by March..

Eyes new geographies

CITING emerging opportunities for growth in new geographies, Satyam Computer Services Ltd is now planning to expand operations to countries in South America and Eastern Europe.

The Chairman of Satyam Computer, Mr B. Ramalinga Raju, said the company was present in over 45 countries but continued to evaluate new geographies for growth opportunities.

Satyam has added about 1,087 people to the company in the third quarter, which, Mr Raju said, was the highest in the last 10 quarters. While the company sees the addition of about 700 to 800 more in the fourth quarter, the overall additions for the year 2003-2004 will be in the range of upwards of 3,000. The headcount has gone up to 12,300.

The company has added 29 new customers including six Fortune 500 companies. Mr Raju said that 75 per cent of the new customer wins last quarter came in competition with large Indian players and global IT services companies with enhanced offshore capabilities. The number of customer visits had doubled, he said.

Commenting on the business scenario, Mr Raju said that the business sentiment had improved and the investor confidence was up. This had led to significant growth in Satyam market capitalisationto about $5.4 billion in ADS terms.

Asked whether the large-scale recruitment would mean upward revision of projections for the next financial year, Mr Raju said that for the time being the projections were confined to the fourth quarter and it would not be appropriate to make long-term projections.

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