Satyam in Rs 327-cr loss
Mahindra Satyam on Monday posted a huge loss of Rs 327 crore in the fourth-quarter ended March as a one-time payment of Rs 569 crore towards the settlement of a class action suit by aggrieved US investors of its previous avatar, Satyam Computer Services, hit home. HT reports. To hell and backbusiness Updated: May 24, 2011 02:02 IST
Mahindra Satyam on Monday posted a huge loss of Rs 327 crore in the fourth-quarter ended March as a one-time payment of Rs 569 crore towards the settlement of a class action suit by aggrieved US investors of its previous avatar, Satyam Computer Services, hit home.
However, the born-again company posted a strong net profit before the compensation payment and saw a healthy 7.5% growth in its revenue to Rs 1,375 crore over the previous quarter ended December 2010 as new orders perked up the core business. It added 12 new clients in the quarter.
Net profit at Rs 245 crore before the exceptional item was up 118% over the December quarter, signalling a clear surge in basic business. Investors sought compensation under the class action suit after the company was rocked by a 2008 accounting scandal.
“The exceptional expenditures will be one-time only and will not be repeated in the coming quarters,” said Vineet Nayyar, chairman, Mahindra Satyam. “This year has been a very satisfying one, given the impressive progress we made on various fronts such as minimising the legal overhang, fortifying governance mechanisms and restoring customer and employee confidence.”Nevertheless, Mahindra Satyam's shares fell 3.2% to close at Rs 73.6.
For the 2010-11 year as a whole, revenues fell by 6.1% at Rs 5,145 crore, with a net loss of Rs 147 crore.
The company however saw margins almost double to 13% but is still far below the 20% or more commanded by industry leaders such as TCS & Infosys.
Analysts, however, are positive. “On the revenue front the company has sprung a positive surprise as they were expected to post only 4-4.5% growth,” said an IT analyst at Angel Broking.