Mahindra Satyam shares rose 6% on the bourses in response to the company’s announcement that it was back in the black with a net profit of Rs.534 crore for the January-March quarter from a net loss in a year ago period. The company’s scrip closed at Rs.71 on the Bombay Stock Exchange on Friday.
The net profit for Mahindra Satyam came from higher revenues and greater employee efficiency. The company had posted a net loss of Rs.327 crore in the same period a year earlier, hit by the cost of a one-off US lawsuit.Hyderabad-based Satyam Computer Services had stunned corporate India in January 2009 when its founder B Ramalinga Raju admitted that he had for years overstated profits and inflated the balance sheet of the company by more than Rs.7,000 crore. After the scandal Tech Mahindra, the IT arm of auto and farm equipment manufacturer Mahindra & Mahindra bought the beleaguered Satyam Computer Services, re-branded it as Mahindra Satyam and has managed to turn things around.
Mahindra Satyam and Tech Mahindra said they would merge soon.
“Despite the uncertainties in the global market, our team has proved its mettle through sustained volume growth, improved margins, key client additions and creation of innovative platform and offerings” Vineet Nayyar, chairman, Mahindra Satyam, said.
The consolidated revenues during the quarter grew at 21% to Rs.1,666 crore as compared to Rs.1,375 crore for the same period of last fiscal. “While the business world grapples with the looming uncertainties, we have been able to swim against the tide,” said CP Gurnani, CEO, Mahindra Satyam.