Mahindra Satyam Q2 net shows dip | business | Hindustan Times
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Mahindra Satyam Q2 net shows dip

Mahindra Satyam on Monday announced the much- awaited results for the two quarters April-June 2010 and July-September 2010. As opposed to market expectations, the company announced a decline in its profit growth in the second quarter over the quarter ended June 2010 on the back of a flat revenue growth and a rise in its employee costs.

business Updated: Nov 15, 2010 20:26 IST
HT Correspondent

Mahindra Satyam on Monday announced the much- awaited results for the two quarters April-June 2010 and July-September 2010. As opposed to market expectations, the company announced a decline in its profit growth in the second quarter over the quarter ended June 2010 on the back of a flat revenue growth and a rise in its employee costs.

In the quarter ended September 2010 the company announced a net profit of R23 crore down from R98 crore registered for the quarter ended June 2010—quarter over quarter (QoQ) a decline of 76%.

The revenues for the two quarters however remained at similar levels. While the revenues for the quarter ended June 2010 stood at R1,248 crore, that for the quarter ended September 2010 fell marginally to R1,242 crore.

The company has marginally raised its employee base, which has gone up from 27,000 at the end of March 2010 to 28,068 at the end of September and its employee cost rose by 5.3% over the first quarter.

The employee cost accounted for 73.6% of the total revenue in the second quarter as against 69.5% in the quarter ended June 2010.

“The results are below expectations and the margins have gone down in the second quarter. Even the employee addition is not encouraging,” said Gaurav Dua, head of research at Sharekhan.

While the results in the second quarter slipped against the performance in the first quarter, the company is optimistic about the benefits from synergy of Tech Mahindra and Satyam.

“The synergies with M&M and Tech Mahindra are quite visible and we are seeing definite traction in our joint go-to-market strategies,” said Vineet Nayyar, chairman, Mahindra Satyam.