Satyam unveils results

Written by Corporate Bureau | Mumbai | Updated: Jun 10 2009, 05:40am hrs
Barely days before Tech Mahindras open offer for an additional 20% stake, Satyam Computer Services made public the unaudited financial details that it had shared with bidders earlier. In a filing with exchanges, Satyam said soon after founder B Ramalinga Raju confessed to perpetrating a Rs 7,000-crore fraud in early January, the company lost about $183 million in contracts from 56 clients up to March 26.

However, Satyam says it received new business orders from 215 mostly existing customers with contract values totalling $380 million during the same period. The company had a bank balance of Rs 373 crore at the end of March 2009, but outstanding bank loans worth Rs 469 crore.

In the quarter ended December 31, 2008, the company had a PAT of Rs 181 crore on revenues of Rs 2,206 crore. Figures for the same period the previous year were not available for comparison. In January, Satyam had a PAT of Rs 4 crore on revenues of Rs 647 crore, and for February, it had a PAT of Rs 52 crore on revenues of Rs 637 crore.

Analysts view Tuesdays announcements as signalling Satyams revival. One analyst with a research firm said, January was the worst month for the company. But the efforts of the board members and senior leaders to retain clients have worked out. We expect Satyam to post revenues of $1.5-1.7 billion by the end of the year, making it among Indias top IT companies.

However, this doesnt indicate across-the-board confidence among clients. It was not initially easy for clients to move out of an IT contract. Now that time has passed, we might see some more clients exiting. However, conditions are better than what they were five months ago, the analyst added.

Shares of both companies reacted positively to the announcement of the financials. Tech Mahindra surged 25.46% on the BSE to touch Rs 744.20 and 25.61% on the NSE to Rs 744. Satyam surged 9.95% on the BSE to Rs 66.85 and 10.05% on the NSE to Rs 66.80. Tech Mahindra, though subsidiary Venturbay Consultants, had announced an open offer on April 22 to buy 20% additional equity in Satyam for Rs 1,154 crore at Rs 58 a share the same price at which it bought a 31% stake through a preferential issue of equity shares. The open offer would start on June 12 and end on July 1.

Satyam lost 9,447 employees between January and February 2009, according to the disclosure. After these exits, the firm had 41,622 employees on its rolls. Nearly 1,600 people quit the firm in February, a month after the scam came to light. More people quit the company after September last year. The numbers ranged between 750 in September to 924 in December 2008.

Despite the fact that numbers released by Tech Mahindra are based on estimates and are not audited, Satyams revenues was above market expectations.