Shares of Mahindra Satyam surged the maximum possible limit of 10 per cent in early trade after the IT major came out with strong quarterly financial performance beating street expectation.
The stock jumped to Rs 91.85 in early trade, which is a new 52-week high for the stock even as the BSE IT index was trailing 0.6 per cent. Meanwhile, the BSE Sensex was down about 0.9 per cent. However, profit-booking dragged the stock to Rs 89.15 (at 11.15 a.m.), still 6.58 per cent higher over the previous day's close. Trading volumes jumped 47.47 lakh shares against the two-week average of 5.34 lakh shares.
Surprisingly, along with Mahindra Satyam, Tech Mahindra appeared to have got a booster dose with the stock spiralling by Rs 42.05 or 5.84 per cent on the BSE to Rs 762.10, bringing the share closer to its 52-week high. Tech Mahindra will come out with its Q1 numbers for the current fiscal only on August 9.
What had worked as an elixir for Tech Mahindra appears to be the announcement by the Mahindra Satyam Chairman Vineet Nayyar yesterday that the merger process was on course and the approval of the High Courts of AP and Maharashtra was awaited. The Tech Mahindra shares jumped Rs 42.05 to Rs 762.10 on the exchange. The stock is close to its yearly high of Rs 779.80 that it touched on August 4 last year. The trading volume also was very high at 1.62 lakh shares compared to the two week average of around 9,700 shares.
Driven by rupee depreciation and improved margins, Mahindra Satyam has posted a 56 per cent growth in profit after tax for the first quarter ended June 30, 2012.
But it is down 34 per cent when compared with the sequential quarter. The quarter-on-quarter profit gained largely by the rupee depreciation, while improved EBITDA margins at 22 per cent (17.5 per cent) too contributed to the higher profits.
The PAT stood at Rs 352 crore against Rs 225 crore the same quarter last year and Rs 534 crore in the previous quarter. Revenue came in dollar terms went up 3 per cent quarter on quarter, mainly led by volume growth. Forex gains stood at Rs 66 crore.
While announcing the results on Thursday, Chairman of Mahindra Satyam, Vineet Nayyar, said the merger process with Tech Mahindra has been progressing well. “We are awaiting the nod from the High Courts of Andhra Pradesh and Maharashtra,” he said.
Promoters holding in Mahindra Satyam (erstwhile Satyam Computer) stands at 42.64 while foreign institutional investors increased their holding to 22.31 per cent in June quarter from 20.81 (March end) and 17.13 per cent (December-end).
Retail investors' interest stands at 20.66 per cent.
Major shareholders (non-promoters) include LIC, Indus Capital Advisor UK LLP, Larsen & Toubro, Goldman Sachs, Abu Dhabi Investments Authority Indent, GMO Emerging Markets Fund and Vanguard International Equity Index Fund.