The Hindu Business Line : Satyam beats guidance; net profit rises 42%

Hyderabad, Oct. 17 Satyam Computer Services Ltd’s net profit increased 42 per cent at Rs 581 crore in the September quarter beating its guidance, compared with Rs 410 crore posted in the corresponding quarter of the previous financial year.

The total revenue grew 38.8 per cent to Rs 2,819 crore (Rs 2,031 crore). Higher personnel and administrative expenses pushed up expenditure by 33 per cent.

However, the company reduced the guidance in dollar terms (as per US GAAP) while increasing it in the rupee terms.

Describing the performance as “better than guided”, the Satyam Chairman, Mr B. Ramalinga Raju, said volume growth, rupee depreciation against the dollar and efficient cost management drove the net profit upwards.

Announcing the performance of the company at a media conference here on Friday, Mr Raju said “We are revising our annual revenue growth guidance in rupee terms upwards between 33 per cent and 35.5 per cent (from 23.9-25.9 per cent) with an annual EPS growth in the range of 33-35 per cent,” he said.

However, due to the appreciation of rupee against other major currencies and prevailing “market conditions” (in the US), Satyam revised growth projections in dollar terms (US GAAP) to 19-21 per cent (from 24-26 per cent).

Satyam reported Rs 8 crore translational gains due to hedging of $615 million in the quarter. The EPS (diluted) was at Rs 8.47 (Rs 5.97). Satyam also announced an interim dividend of 50 per cent for the fiscal year 2009.

BPO loss

Satyam BPO continued to be in losses in the quarter under review. It incurred a loss of Rs 20 crore, down from a loss of over Rs 22 crore in the year-ago period. It would turn profitable only after one or two years, according to the company.

The crisis in the US banking and financial sector and consolidation of financial services companies are causing some “uncertainty”, Mr Raju said, adding, “We, however, are looking for transformational opportunities. The company would remain invested in the BFSI sector where it has a ‘low’ exposure.” The pricing is, however, somewhat stable in the other sectors, he added.

The BFSI sector contributed 20.50 per cent of total revenues in the quarter under review which fell from 23.81 per cent in the year-ago period.

Satyam added 33 new customers globally during the quarter and added 1,814 associates (employees).

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