The Hindu Business Line : Satyam to focus on growth in SEZ units

Hyderabad April 20 The Chief Financial Officer of Satyam Computer Services, Mr V. Srinivas, on Friday said that the company has sewn up plans for a capital expenditure of $100 million (about Rs 430 crore) during 2007-2008, up from $88 million in 2006-2007.

Addressing a press conference along with Satyam management, Mr Srinivas said that a large part of this would go into setting up centres in special economic zones (SEZs) in Hyderabad, Vizag, Chennai and Nagpur.

Asked about some of Software Technology Parks of India (STPI) units close to the coming out of the tax concessions, Mr Srinivas said that when they come out of these units, they would have to pay higher taxes at 11.8-12 per cent, instead of 10 per cent. About four such centres are now set to come out of STPI fold.

As a part of the growth strategy, the focus therefore was on building facilities in the special economic zones and grow them simultaneously. These include a 25-acre site near Hitec City near here in Hyderabad, a 25 acre site in the 120-acre Satyam Technology campus at Bahadurpally, about 25 km from Hyderabad, another SEZ in 50-acre site in Vizag and a 50-acre SEZ site in Chennai and 130-acre site in Nagpur.

BILLING RATES

Referring to billing rates, the company sees many of the new deals fetching higher billing rates and this trend could continue during fiscal 2008, Mr Srinivas said.

Asked about the potential impact of weakening dollar and strengthening rupee, Mr Srinivas said "we have estimated dollar to be at Rs 42.30 during 2008. This could translate to about 200 basis points. And effective hedging could cover about half of this impact. Factoring all these issues and company's hedging strategies, we expect to hold the operating margins at the current levels that would be healthy and positive."

NIPUNA

Commenting on the performance of subsidiaries, including Nipuna, the Satyam Chairman, Mr B. Ramalinga Raju said that Nipuna recorded revenues of $38.3 million, a growth of 91 per cent over fiscal 2006 and provided a revenue guidance of $61 million that reflects a growth of about 60 per cent during FY 2008. Asked about Satyam's plans to buy out investors in Nipuna, Mr Raju said that would go as per plans and possibly take place during the quarter.

The company continues to grow in new regions such as Brazil, China and Malaysia.

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