Satyam's net profit up 29 pct in Q2
The result completes a resounding performance in the outsourcing-based sector, reports Ashok Das.india Updated: Oct 20, 2006 18:00 IST
Satyam Computer Services Limited, the country's fourth-largest software exporter, said on Friday its net profit rose by 28.6 per cent to Rs 322.4 crore for the second quarter of the current financial year, compared with the same period a year ago, completing a resounding performance in the outsourcing-based sector in which the top three, Tata Consultancy Services, Infosys and Wipro, have reported strong results.
Like the big three, Satyam's performance also went beyond most analyst estimates. Its revenue from software services stood at Rs 1,601.9 crore in Q2, up 38.7 percent from the same quarter last year.
“Q2 continued to witness the benefits of operational efficiency which helped us to mitigate the impact of salary hikes on margins. In addition, subsidiaries, for the first time, contributed positively to the margin," said Srinivas Vadlamani, Satyam's chief financial officer.
Satyam, whose engineers help companies install and support corporate software for global clients, also revised its revenue guidance for the full year to a range of Rs. 6,452 to 6,476 crore. The corresponding annual growth rate is expected to be 34.6 to 35.1 percent. The earlier forecast for annual revenue was Rs.6,190 crore to Rs.6,290 crore.
Earnings per share (EPS) for the quarter at Rs.4.89 shows a year-on-year growth of 32.5 percent. EPS guidance for the year has been revised upwards to Rs.20.73 to Rs.20.81, from the earlier estimate of Rs. 19.45 to Rs.19.75.
“The revenue and earnings per share for Q2 have exceeded the forecasted range on the back of strong volume growth of 9.5 percent,” Satyam chairman B Ramalinga Raju said.
Satyam said it added 35 customers, including a leading airline, a Korean auto major and a European confectionary giant in the second quarter. It also won a large order to implement a comprehensive contract from a large Indian bank.
Satyam said it added 4,025 employees during the quarter, taking the total employee strength to 31,659. Total employees including those of subsidiaries and joint ventures stood at 34,908.
Satyam and Microsoft have launched two state-of-the-art Business Intelligence (BI) facilities in Singapore and Shanghai. The two sites will be centres of excellence, where researchers will use real-life scenarios and data to test, develop, and implement innovative solutions for the financial services sector. These labs will also enable the two companies to study customers’ requirements more quickly to ensure faster and more cost-effective implementation of BI solutions.
Citisoft, a Satyam subsidiary, is working with the offshore operations centre of an Anglo-American asset manager, in helping them set up an hedge fund administration environment.