The Hindu Business Line : Satyam plans to recruit 3,000 this year

SATYAM Computer Services Ltd has reworked its plans to strengthen its total number of associates based on the positive business traction. It is set to recruit about 3,000 associates this fiscal against its earlier plans to add about 1,500.

Speaking to newspersons, the Satyam Chairman, Mr B. Ramalinga Raju, on Thursday said that the company has added 27 new clients during the quarter ended September 30, 2003 including five Fortune 500 customers.

The number of customers with an annual run rate of a million dollars has increased from 64 in the first quarter to 72.

"Prices are progressing towards stability. The main issues, which continue to engage us, relate to attrition, cost management and unabated appreciation of the rupee. These will have some effect on near term margins. Even so, we have decided to enhance associate salaries, based on performance, effective from October 1, 2003," he said.

"With regard to Nipuna, having recently announced investments by Olympus Capital and Intel Capital, we are continuing to progress on every front - customer additions, transition from pilots to full engagements, higher employee count."

A significant number of clients see this as an extension of Satyam, and this is expected to bring in results in the long term, he added.

GE continues to be Satyam's largest business provider accounting for about 16.5 per cent of its total revenues. However, this once used to be 20 per cent.

Against 15 per cent revenue from GE in the first quarter, Satyam has managed to add additional business that comes from some 11 different companies within GE.

On the possibilities of GE severing its ties and likely impact, Mr Ram Myanampati, President, said: "We constantly evaluate business risks and base our plans on firm footing. It is necessary to understand the strong relationships we have built up over the years with a major like GE. These relationships and the value we bring to them ensure that strong business traction.

The company cash reserves are pegged at Rs 1600 crore. Satyam projections for Q3 refer to software revenues.

Sify stake sale

During the quarter ended September 30, Satyam had concluded the sale of about a million shares in Sify Ltd., through the latter's sponsored ADS programme. The company garnered $4.35 million from the sale of three per cent stake in Sify.

Consequent to this sale, Satyam's stake in Sify stands reduced to 32.1 per cent from 35 per cent. Late last year, this was brought down from 52 per cent to 35 per cent after VentureTech and SAIF investment of $20 million.

Together, with the earlier proceeds of $ 50 million in September 2000 from the sale of 106 per cent stake in Sify to GSIC, Singapore, Satyam has so far realised $54.35 million against its initial investment $5 million in the company.

The Chief Financial Officer of Satyam, Mr V. Srinivas, said with Sify clearly in sight of break even and profitability, Satyam's residual stake of 32.1 per cent in the company represents substantial shareholder value. When to divest this will be based on the value we can create for our company shareholders.

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