The Hindu Business Line : Satyam Q1 net rises 7% at Rs 378.32 cr

On strong footing
Strengthening rupee shaved off about Rs 138 crore from the overall profit.
The company is on course to achieve $2 billion revenues this fiscal.

K. Ramesh Babu

Limiting rupee impact: Mr B. Ramalinga Raju, Chairman, Satyam Computers, addressing a press conference in Hyderabad on Friday. —

Our Bureau

Hyderabad, July 20

IT services provider Satyam Computer today announced a mixed set of numbers for the first quarter ended June 30, 2007, with surging rupee clipping its profits.

The company recorded revenues of Rs 1,893.39 crore (Rs 1,517.41 crore) with a net profit of Rs 378.32 crore (Rs 354 crore) for the first quarter reflecting a growth of 24.78 per cent and 6.87 per cent respectively.

Good Beginning

However, the profit was lower by about 3.8 per cent over sequential quarter (Q4 last fiscal). The Chairman of Satyam Computer, Mr B. Ramalinga Raju, told newspersons that “overall, it was a strong first quarter performance and a good beginning to the financial year 2008, a year when Satyam total income will exceed the $2 billion mark.”

However, strengthening rupee impacted the company’s profitability, in effect shaving off about Rs 138 crore in the overall profit. However, its initiatives and hedging approach have paid off limiting the overall impact.

The Satyam’s charge from first to second billion is likely to be achieved in 18 months. The Chief Financial Officer of Satyam, Mr V. Srinivas, said: “Strong volume growth and increased revenue productivity along with operational efficiencies helped us mitigate challenges posed by an unprecedented 7 per cent rupee appreciation during the quarter.”

Consulting Business

Providing the company business outlook, the company management said for fiscal 2008, revenue is expected to close to the $2-billion mark, implying a growth of 34 to 35.5 per cent (in US GAAP) and 21 to 22.5 per cent (under Indian GAAP) over fiscal 2007.

Mr Raju said that engineering services and infrastructure management services grew by 14 per cent and 36 per cent respectively, validating significant investments in these areas over the past several years. Alongside, the company’s consulting and enterprise business solutions grew by about 15 per cent during first quarter of 2008.

The company maintained that they were engaged in dialogue with numerous clients which could potentially help expand the business. Citing the recent case of long-term engagement with Nestle, Mr Raju said that the discussion with some of the potential customers indicated that the demand environment is positive.

The company shares at BSE ended the day lower at Rs 477.85 compared with previous day’s close of Rs 486.65.