Satyam faces more flak

Among software companies, no stock gets as much flak from analysts as Satyam Computer Services. While no major broking house has a sell rating on the stock, analysts rarely let go any chance to take a potshot at the Hyderabad-based IT major.

A foreign brokerage is the latest to join the list. Its recent report suggested that in case the US economy slows, on almost all counts Satyam would take the greatest hit.

Its sensitivity analysis shows that any bill rate decline could be offset by a increase in utilisation among others — but it warns that Satyam has the least cushion on this count.

It says that from a possible rupee depreciation, Satyam could benefit the most. But this come with a rider — the company would take a hit on the unrealised hedges already marked-to-market last quarter.

It signs off by saying that given its greater exposure to discretionary spend (enterprise solutions), Satyam’s revenues could be at higher risk in case US corporate profits slowdown. The brokerage still owns close to 2% in the company.