The Hindu Business Line : Satyam’s billing rates ‘may go up by 2-3%’

Satyam Computer on Friday hinted that the overall billing rates could be up by about 2-3 per cent during fiscal 2008 over fiscal 2007 and results of such hike are already being reflected during the first quarter.

The first quarter profitability was hit on two counts, one the surging rupee and the second increase in wages to its associates. However, the company expects this to be greatly offset by the firming billing rate scenario.

The Chairman of Satyam Computer, Mr B. Ramalinga Raju, said that the business momentum was positive and this was reflected in the addition of 29 new customers during first quarter of 2007-2008, including two Fortune 500 customers. The number of customers billing more than $5 million had increased from 57 to 65 plus during Q1.

Rising rupee

The company had taken up several measures to tackle the rising rupee scenario. The offshore component too has increased by 135 basis points. The hedging policy too has paid off partially and the company has hedged about $750 million.

The Chief Financial Officer of Satyam, Mr V. Srinivas, said that the company has taken the dollar rate at about Rs 40.50 for the year. However, he said that for a fair evaluation of the company performance, one needed to assess in dollar terms as that would be the best way to analyse the company’s performance compared to a volatile rupee.

In spite of the rupee surge, the company management maintained that they performed better than the guidance in the rupee terms.

Offshore component

The revenue mix reflects that the offshore component accounts for 51.96 per cent versus 48.04 per cent onsite during first quarter. The offshore component was up by more than one per cent. While the Americas contributed 61.71 per cent of the total business, Europe pitched in with 20.10 per cent and the rest of the world (18.19 per cent).

Application development and maintenance accounted for 43.70 per cent, followed by consulting and enterprise business solutions (44.20 per cent). Banking, financial services and insurance accounted for 23.75 per cent, followed by manufacturing (25.87 per cent), and telecom and allied areas (21.95 per cent).

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