Satyam Computers

Tuesday, October 23, 2007 | | |

The company has reported a consolidated net profit of Rs4.09bn Vs. Rs3.78bn in the same quarter of the previous fiscal year.

Satyam Computer Services Ltd. has reported a consolidated net profit of Rs4.09bn for the fiscal second quarter versus Rs3.78bn in the same quarter of the previous fiscal year. This translates into a sequential growth of 8.14%. Net sales for the July-September 2007 quarter stood at Rs20.32bn as against Rs18.3bn in the year-ago quarter, reflecting a quarter on quarter (QoQ) growth of 11%.

On year-on-year (YoY) basis, growth in net profit was 27.9% and that in total income 31.4%. Earnings Per Share (EPS) for the reporting quarter was Rs6.12 compared to Rs5.67 in the preceding quarter. This represents a sequential increase of 8% and a YoY increase of 25.1 %.

At 19.82%, EBITDA Margin was better than 22.42% in the first quarter of the current fiscal year and 22.63% in the second quarter last year.

Satyam has managed to beat its own guidance for the quarter ended September 30, 2007. Income from software services was projected to come in at Rs19.17bn to Rs19.26bn and EPS was expected to be Rs5.36 to Rs5.41.

"The second quarter was exceptionally strong as we reported substantially better than expected revenue, broad based across key verticals, services and regions. We continue to win and ramp-up our engagements with strategic clients in our efforts to enable business transformation," Satyam Chairman Ramalinga Raju said.

"Strong volume growth and increased billing rates helped us post 12.7% revenue growth for the quarter. Margins for the quarter declined as salary hikes were finalised. Now that the increments are behind us, higher productivity and enhanced operational efficiencies will help us improve margins going forward," Satyam CFO V. Srinivas said.

"Our efforts to stem attrition and develop leaders are bearing fruit, and fulfilling an important market need," Satyam said. Attrition at 13.89% on a trailing 12-month basis for Q2 FY08 has been on the decline for the fifth consecutive quarter.

The parent company ended the quarter with 41,423 associates, an addition of 3,037 (including 1,889 trainees). The number of associates, including the subsidiaries and joint ventures stood at 45,767. Attrition on a trailing twelve months basis fell to 13.9% from 14.9% in Q1 FY08.

Satyam said that the company saw strong demand across all verticals, with TIMES and BFSI performing particularly well. TIMES continued its strong growth with a 20% increase sequentially while BFSI grew by 12.4% sequentially.

" The noteworthy growth rate of BFSI validates our belief that recent concerns in this market segment had little or no effect in our core business in this vertical," Satyam said. The demand for services in the consulting and enterprise business solutions space continues to be strong leading to a 14% sequential growth. it added.

Satyam is changing the name of our BPO subsidiary to Satyam BPO Ltd. from Nipuna Services Ltd. consequent to its decision to buyout external stakeholders. " Customers are today much more positively inclined about receiving the entire value chain of services from a single organization and in that context, this move would be in line with market demand," Satyam said.

The Board of Directors has approved an interim dividend of 50% for the fiscal year 2007-08.