Mahindra Satyam (Satyam) has managed to deliver robust revenue growth in the March quarter, outpacing frontline players such as TCS, Infosys and Wipro on this front.

While slipping into losses has been viewed negatively by the market, this was largely due to the one-off payment of Rs 567.1 crore as a settlement amount in relation to the class action suits. With the Upaid as well as the SEC cases settled, most legal tangles appear out of the way for the company.

The only sore point is the dispute with the IT department being fought in the Supreme Court, over demand for payment of Rs 617 crore from Satyam for taxes payable during 2003-08.

In the March quarter, Satyam saw its revenues increase by 7.5 per cent to Rs 1,375 crore sequentially, which is much higher than the 3-5 per cent growth witnessed by top-tier IT companies.

Sound client addition, stringent control over employee and administrative costs and a downward trending attrition rate are notable aspects during the quarter.

On recovery path

What is heartening for Satyam is the growth in both its IT services and BPO segments. BPO services contribute only around 3 per cent to overall revenues, but revenues from this offering have grown by nearly 20 per cent sequentially.

This suggests a return in confidence among its clientele. What reinforces this is the fact that the company has seen its active client base increase from 217 to 230 in the March quarter. The company's move late last year to reclassify active clients as only those that contribute $2,50,000 or more to revenues, means that newer clients may be those that are more lucrative to the company.

Satyam has also managed to keep a tight leash on expenses, with employee costs (Rs 904.1 crore) and operating & administrative expenses (Rs 292.9 crore) remaining at more or less the same levels as previously.

Attrition too has come down from 25 per cent levels to 22 per cent currently, suggesting a return to stability and a lower pressure on wage bills.

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