Satyam Q2 income up by 42 per cent

Hyderabad: Satyam Computer Services has announced revenues of Rs848.10 crore for the second quarter-ended September 2004-05. The company's revenue is up 9.93 per cent sequentially against the previous quarter and was up by 42 per cent against the corresponding period in 2003-04.

The company has declared a net profit of Rs189 crore, up 9 per cent against Q1, 2004-05 and 28 per cent up against the corresponding period last year. EPS for the quarter stands at Rs5.95 slightly higher than the guidance of Rs5.48.

Addressing the Indian media through a video conferencing call, Ramalingam Raju, chairman and managing director, Satyam Computer Services, said, "The strong growth in revenue was accompanied by margin expansion an account of continued rationalisation and in selling, general and administrative expenses. The broad-based growth across verticals is a noteworthy feature of our performance in Q2. The threshold revenue limit for entry into the top 10 has increased by 87 per cent compared to the corresponding quarter last fiscal is indicative of our enhanced intimacy with our existing customers."

According to Raju, though the company has shown impressive results, the margins in Q3 are likely to come under pressure due to rising manpower costs. He said the company has revised remuneration twice since April this year to curb attrition rates now hovering around 18-20 per cent.

Satyam's stock opened at Rs397 on the Bombay Stock Exchange and had fallen to Rs378.50 by afternoon trades, mainly due to the company's guidance announcement for Q3 being under pressure.

Raju said Satyam Computer Services, though not in the league of the large systems integrators in terms of payouts, continued to be among the top ten paymasters.

He indicated that future manpower increases were likely to come from Satyam's operations in Hungary and South America.

He said that the majority, about 55 per cent to sixty per cent of Satyam's revenues were coming from long- term clients. He said a typical engagement with a client ranged from six to eight months and went up to three to four years. Most of the company's growth according to Raju came from volumes, and the company has about twenty-seven Fortune 500 companies as clients.