Satyam PAT at Rs 548 cr; eyes 20-odd buyout deals

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Satyam Computer Services reported a net profit of Rs 547.7 crore, an Y-o-Y increase of 44.8% and a sequential increase of 17.3% for the first quarter ended June 30, 2008. Total income stood at Rs 2,620 crore, an Y-o-Y increase of 43.2% and a sequential increase of 8.5% and EPS for Q1 2009 was Rs 8.16, a Y-o-Y increase of 43.9% and a sequential increase of 17.1%.

Following this, the company has revised its guidance for FY08-09 which is expected to be between Rs 11,181 crore and Rs 11,363 crore with a growth rate of 32-34% for fiscal 2009. For Q2 FY 2009, the corresponding revenue is expected to be between Rs 2,743 crore and Rs 2,769 crore implying a growth rate of 4.7% and 5.7%. EPS for the quarter is expected to be between Rs 7.71 and Rs 7.78.

“Despite difficult economic environmental conditions in key markets, we grew by 8.5% as per Indian GAAP, which was mainly due to rupee depreciation and margin management. This, along with sustained operational efficiency, led to an increase in operating margins in Q1 which is also expected to bolster annual margin performance,” B Ramalinga Raju, chairman, Satyam Computer Services said. The milestone for Q1 is that we have achieved a revenue run rate of Rs 10,000 crore, he added.

Moreover, the company has managed to garner a higher share of customer spending. It is witnessing increased business activity in Asia-Pacific and Middle East markets. However, large amount of focus is still in the US. Accepting that the billing rates have come down, Raju said that there has been a marginal reduction which is about five cents in offshore billing and 10 cents in onsite billing. “For the existing and new clients, it remains at constant current levels for this fiscal. Overall, the condition is stable at the current levels,” he said.

Further, the company has reported Rs 36 crore as losses because of hedging. According to V Srinivas, CFO, the company hedges about 50% of its turnover. “Despite volatile conditions, we will neither be hit nor benefited and will always have a breakeven condition since we evenly hedge,” he said.

On the services front, the company is seeing less of activity in the banking and financial services sector. “We are yet to see clear and consistent signals emanating from the BFSI sector and it continues to be fluid,” Raju said.