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Mahindra Satyam has said it is cautiously optimistic as its net profit for the third quarter ended December 31, 2010, went up by one-and-half times at Rs 59.60 crore as against Rs 23.30 crore in the previous quarter. The revenue has risen by 3 per cent to Rs 1,279 crore (Rs 1,242 crore).
The profitability of the company has gone up in the quarter with EBITDA (earnings before tax, depreciation and amortisation) going up to 6.4 per cent from 5.8 per cent in the previous quarter. Lesser tax expenses in the quarter at Rs 15.9 crore (Rs 27 crore) and increase in other income at Rs 87.3 crore (Rs 31.3 crore) helped increase the net profit. The company made a forex gain of Rs 13.4 crore as against a loss of Rs 9 crore.
Profit would have been at Rs 129 crore but for erosion of assets in value of assets in subsidiaries to the tune of Rs 53 crore, Mr Vineet Nayyar, Chairman, Mahindra Satyam, said.
The company's shares went up by 11.66 per cent on the Bombay Stock Exchange on Monday to close at Rs 66.10 as against the previous close of Rs 57.90.
Cautious optimism
Addressing a press conference here on Monday, Mr Vineet Nayyar and Mr C. P. Gurnani, Chief Executive Officer, Mahindra Satyam, said the company was cautiously optimistic for the next year. They saw lifting of ‘embargoes' ‘and ‘wait-and-watch' alerts as a good sign. This would give them headway in pitching for large deals.
“We have set a target for a certain trajectory. Many had higher expectations. We too had. But keeping in mind where we had started, it is a good growth rate,” they said.
Mr Jimit Arora, Research Director at the research and analysis firm Everest Group, said results were in tune with the prediction that the recovery was going to be a slow one. “Any new engagement will take some time to reflect in the financials,” Mr Arora, who has been tracking the scam-hit company, told Business Line .
Earnings per share (after exceptional items) stood at Re 0.50 for the quarter as compared to Re 0.20 in the second quarter, while consolidated cash and cash equivalents were put at Rs 3,048 crore, up from Rs 2,996 crore during the period.
Employee costs saw a marginal decline at Rs 908 crore (Rs 913 crore). For the nine-month period it stood at Rs 2,690 crore.
New CFO
With Mr Durgashankar, CFO, deciding to move back to the parent group, M&M, Mr Vasanth Krishnan was appointed as the new CFO.
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