Satyam Q1 net rises 86%
Satyam Computer Services has rolled into the ’06-07 fiscal with a sharp 86% rise in net profit at Rs 354.1 (Rs 190.2 crore in Q1 ’05-06) in the first quarter, marked by 34 new customers, addition of clients in the $10-m category and a favourable r...
By TNN |
HYDERABAD: Satyam Computer Services has rolled into the ’06-07 fiscal with a sharp 86% rise in net profit at Rs 354.1 (Rs 190.2 crore in Q1 ’05-06) in the first quarter, marked by 34 new customers, addition of clients in the $10-m category and a favourable rupee climate.
Satyam’s revenues also beat guidance to touch Rs 1,443 crore in the first quarter ’06-07 against Rs 1,058 crore in the corresponding quarter of the previous year, a 36.3% growth.
Taken sequentially, Satyam Q1 net profit of Rs 354.1 crore is 24.4% higher than Rs 284.65 crore in the fourth quarter of the previous year and its Q1 FY07 revenues stand nearly 10% higher. The EPS for the first quarter stood at Rs 10.87. Satyam’s operating profit margin is up in Q1 FY07 at 24.6% against 22.7% in the corresponding quarter last year.
Sequentially, the operating margins are lower compared to 25.5% in the quarter ended March ’06. Satyam’s scrip closed 34% lower on BSE at Rs 716.05.
Addressing a press conference, Satyam chairman B Ramalinga Raju said, “The revenue growth has been fuelled by a 7.2% increase in volumes and a higher contribution from offshore business. Over the last four quarters, offshore contribution has increased by 4% and now stands at 47%.”
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The company has also witnessed a sequential increase of $10-m customers from 27 to 33 in Q1 this year. The number of customers with annualised billing over $5m has also increased sequentially from 46 to 51, he added. Buoyed by the Q1 show, Satyam has revised its annual ’06-07 guidance upwards in the region of 29.2% to 31.2% that translates into revenues of Rs 6,190 crore to Rs 6,290 crore against the ’05-06 achievement of Rs 4,793 crore. The company had earlier pegged its’06-07 revenues at Rs 6,000 crore to Rs 6,100 crore. As per the revised guidance, the EPS is also expected to grow between 27.5% and 29.5%.
Commenting on the performance, Satyam CFO V Srinivas said, “The rupee depreciated by 3.4% and this has helped our numbers. The rupee has depreciated by 2% since our initial guidance.”
Satyam is pinning focus on enterprise business solutions and consulting solutions even as it is looking at expanding in geographies like South America. The company, whose attrition stands at 19.6% in Q1, added 1,123 new employees this quarter taking the total employee strength to 27,634. The company plans to add 10,000 to 12,000 more employees this year on a gross level.
Satyam has effected upward wage revision of 18% for its offshore employees and 6% for its onsite employees from July 1. Commenting on attrition rates, Mr Raju said the company expected a reversal in trend especially with the attrition level coming down by almost 2%, as per the annualised attrition level.
Nipuna, Satyam’s BPO subsidiary, recorded revenues of Rs 36.7 crore or $7.93m in the first quarter of ’06-07 and its revenue guidance for fiscal ’07 stands at $36m. The subsidiary, which suffered a net loss of Rs 6.15 crore in Q1, has added 240 employees this quarter taking the total number to 2,005.
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