Revenues from Satyam to flow in by Q1 of next fiscal

Written by Rachana Khanzode | Updated: Jul 24 2009, 08:29am hrs
Sonjoy Anand
After acquiring a 42.7% stake in Satyam Computer Services, Tech Mahindra seems to face post-investment jitters. The company saw its net profit dip of 42.8% q-o-q to Rs 131.6 crore from Rs 230.4 crore, and 49.3% y-o-y from Rs 258.5 crore. In an interview with FE's Rachana Khanzode, chief financial officer at Tech Mahindra Sonjoy Anand spoke about payment of loans and outlook for Tech Mahindra.

After forex loss of Rs 26 crore and interest payment of Rs 57 crore, the company's net profit slipped. For how many more quarters do you think will Tech Mahindra witness the impact of interest pay back on results

We took a loan of Rs 2,380 crore for a period of one to five years and have the flexibility to pay back the amount in surplus whenever we want. However, such a large amount cannot be paid back at one go. We are trying to devise a strategy on how it can be done. It is to be seen that this amount is still lying in Satyam's account where we hold 42.7% stake. The interest payment was for a period of just over two months.

So, when is Tech M expected to see revenues flowing in from Satyam

According to the Company Law Board (CLB) directions, we need to have the accounts restated by December. We have already started leveraging our stake in the company and there is stability with customers. At the same time, we have progressed on cost-effective measures and continue to face challenges while moving ahead. A good access of revenues flowing in from Satyam could be expected by the same period next year.

What is the deal pipeline outlook for Tech Mahindra at the moment

The deal pipeline looks good at the moment and we are looking forward to significant contracts. The discussions are on. We need to wait and watch how things emerge. Though pricing is under pressure, we have not seen much of an impact. Also, we continue to see delay in decisions from our clients.

What about the BT deals Do you expect any ramp ups

As indicated by our peers as well, BT has been cutting down on spends. At the same time, BT being a UK client, the volatility in pound currency is expected to impact further. Revenues from the core BT business are at $70 million and it is flat from the last quarter revenues.