The Hindu : Business : Satyam Q2 net up 42 %

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Saturday, Oct 18, 2008
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Business

Satyam Q2 net up 42 %

Special Correspondent

Company wary about banking and financial services segment

Declares 50 % interim dividend
Scales down revenue guidance under U.S. GAAP

— PHOTO: K. RAMESH BABU

CHALLENGING ENVIRONMENT: B. Ramalinga Raju, Chairman, Satyam Computer Services, announcing the second quarter results in Hyderabad on Friday.

HYDERABAD: A significant appreciation of the rupee against currencies other than the U.S. dollar impacted the expected annual revenue growth of the NYSE-listed Satyam Computer Services. However, the company posted a 42-per cent rise in the net profit at Rs. 580.90 crore in the second quarter of 2008-09 against Rs. 409.90 crore in the corresponding period last year.

The company scaled down its prospective annual growth rate in terms of U.S. GAAP (generally accepted accounting principles) to 19-21 per cent from 24-26 per cent. However, the company enhanced its guidance in terms of Indian GAAP to 33-35.4 per cent.

Addressing a press conference here on Friday, Satyam Computer Chairman B. Ramalinga Raju said the company restricted the recruitment to about 10,000, compared to its proposed 14,000 employees. It was wary about the banking and financial services market what with the economic slowdown in the global markets.

Company’s board member Ram Mynampati said the software services contract with the World Bank ended on September 30 and it was not renewed in accordance with the bank’s stated policy of not continuing contracts after a stipulated period.

The revenue in the second quarter was pegged at Rs. 2,819.29 crore, an increase of 38.76 per cent compared to Rs. 2,031.72 crore in the quarter under reference last year.

In terms of U.S. GAAP, the company posted a revenue of $652.2 million, an increase of 28 per cent against the $509.60 million in the corresponding period last fiscal.

The transnational gains due to hedging were pegged at Rs. 8 crore, said Srinivas Vadlamani, Chief Financial Officer. The company would continue to hedge 50 per cent of its dollar inflows in tune with its policy.

Mr. Mynampati declined to comment on whether the organisations that acquired Lehman Brothers and Merrill Lynch would continue their businesses with Satyam. He described the economic slowdown as a challenging opportunity and the company would stay invested in the financial services segment in the U.S. markets.

The company declared an interim dividend of 50 per cent for 2008-09 and its earning per share (EPS) was Rs 8.47.

Mr. Raju said it would take a couple of years for the Satyam BPO to turn around The company added 33 new clients in the last quarter and the net addition of employees was 1,814 in the second quarter. The attrition rate came down to 12.6 per cent.

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