Satyam closer to $1-b mark Q2 net up 34 pc; revises outlook upwards

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Our Bureau

Hyderabad, Oct. 20

SATYAM Computer Services Ltd has recorded total revenues of Rs 1154.97 crore and a net profit of Rs 237.34 crore for the second quarter ended September 30, 2005.

This reflects a growth of 9.09 per cent in revenues and a 24.78 per cent increase in net profit sequentially, and an increase of 33.97 per cent in revenues and a 34.19 per cent increase in net profit over the corresponding quarter last year.

Following this robust growth, the company has revised its guidance for the full year wherein it expects the consolidated revenue to be Rs 4,700-4,718 crore, implying an annual growth rate of 33.5-34 per cent. The revenue guidance in the beginning of the year was 26-28 per cent. The earnings per share (EPS) for the fiscal 2005-06 is expected to be between Rs 29.12 and Rs 29.23. The company has approved an interim dividend of 100 per cent for this fiscal. The Chairman of Satyam Computer, Mr B. Ramalinga Raju, said, "This was the first quarter where we achieved annualised revenue run rate of a billion dollars. We continue to experience increased momentum in the market and believe that the demand for business solutions using the global delivery model is robust."

Addressing newspersons over a videoconference facility from Satyam's development centre at Budapest, Hungary, Mr Raju said, "With about 98 per cent of the company revenues coming from overseas operations, we decided that one quarter every fiscal we will hold a meeting at one centre abroad."

The company's net profit was $52 million, reflecting a growth of 38.43 per cent year-on-year.

"Given the current trend, we would be the youngest Indian IT company to achieve the billion-dollar mark later this year, which is extremely gratifying, given the growth projections and achievements," he said.

Referring to the acquisitions made by the company, Mr Raju said, "We have made steady progress in integrating the consulting practice of Citisoft and Knowledge Dynamics with Satyam. Many of our customers have expressed keen interest in our integrated solution offering, resulting in significant increase in the pipeline of opportunities that we are pursuing."

The consulting business accounted for about 6 per cent of the total revenues, and the European business continues to grow significantly. Particularly, the banking and financial services vertical and enterprise consulting have performed extremely well, he said.

While all the other Satyam subsidiaries, Nipuna, Satyam Technologies Inc, Satyam Computer Services Shanghai, Citisoft plc and CA Satyam ASPregistered marginal losses, Satyam Venture Engineering Services earned a profit of Rs 2 crore on revenues of Rs 15.50 crore.

As against the previous close of Rs 557.50, Satyam's shares ended the day up at Rs 587.45 on the NSE.

(This article was published in the Business Line print edition dated October 21, 2005)
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