Satyam Q3 net profit jumps 25% | india | Hindustan Times
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Satyam Q3 net profit jumps 25%

The software exporter's third quarter net profit is in sync with expectations, thanks to a boom in global outsourcing, reports Ashok Das.

india Updated: Jan 21, 2007 01:06 IST
Ashok Das

Satyam Computer Services Limited on Friday announced a 31 per cent YoY revenue growth and a net profit of Rs 337.23 crore during the third quarter ended on December 31, 2006.

The Board of Directors of the company approved the audited results of the company for the third quarter.

Revenue from software services stood at Rs 1,661.12 crore, up 31.3 per cent on a YoY basis and 3.70 per cent sequentially. The revenue for the current year is expected to be in the range of Rs 6,434 crore and Rs 6,442 crore. The annual growth rate is expected to be 34.3 per cent to 34.4 per cent.

Operating margins improved 205 basis points sequentially on the back of operational efficiencies and increasing offshore. Net profit, at Rs 337.23 crore, indicates a YoY growth of 25.02 per cent.

EPS for the quarter at Rs 5.14 shows a YoY growth of 23 per cent. EPS guidance for the year is revised upwards to Rs 20.90, from the earlier estimates of Rs 20.73 to Rs 20.81.

Addressing a media conference, B Ramalinga Raju, founder & chairman, Satyam, said, "The company has achieved 7.7 per cent sequential revenue growth in Q3 in US dollar terms. This translates into a 3.7 per cent growth in rupee terms under consolidated Indian GAAP.

The growth differential is in view of the 3.7 per cent rupee appreciation against the US dollar in Q3. The revenue growth was accentuated by a 11 per cent offshore volume increase."

"A significant positive development in Q3 performance is the expansion in EBITDA margins by over 200 basis points on account of enhanced efficiencies and reduction of delivery cost. Consequently, EPS at Rs 5.14 was higher than the guided figure of Rs 5.11," he added.

Ramalinga Raju said Q3 saw an increase in the contribution of consulting and enterprise business solutions, which now stands at 42 per cent of revenue.

Srinivas Vadlamani, CFO, Satyam said, "The highlight of this quarter is 205 basis points improvement in EBITDA margins under consolidated Indian GAAP despite a negative impact of 120 basis points on the margins because of 3.7 per cent rupee appreciation. EPS at Rs 5.14 was higher than the guidance inspite of Rs 35 crore foreign exchange loss."

Satyam added 2,476 associates in the quarter, taking the total employee strength to 34,405. Total resources, including those of subsidiaries and joint ventures, increased to 38,188.