Satyam beats expectations

21 April 2007

Technology firm Satyam Computer Services has posted a stellar set of numbers this quarter, way above street expectations. The company reported net profit of Rs394 crore (Rs3.94 billion) in the fourth quarter versus Rs337.23 crore (Rs3.37 billion) in the previous quarter, a growth of 16.92 per cent.

Commenting on the results Ram Mynampati, president, Satyam says the company is entering FY08 with positive and strong sentiment. "We have acted on many issues internally and focussed a great deal on operational excellence and it has resulted in improvement in performance," he says.

The company is likely to get 2 per cent - 3 per cent increase in realisation in FY08 with new deals coming at higher average prices and existing contracts renegotiated at higher prices.

FY08 onsite wages for the company was seen up 5 per cent while the offshore went up 16 per cent. The annualised attrition rate was at 13 per cent, in spite of the industry moving towards high attrition levels.

Ramalinga Raju, founder and chairman, Satyam Computers, feels that some of the factors for the good growth were addition of new customers and enhancement of operations with existing clients. Mynampati adds, "In FY07 we won three large deals in addition to what we had won in the previous year and the pipeline looks fairly robust. With the special emphasis that we have brought to the pursued of large deals we are certainly hopeful that we would have a fairly good share of success"

Raju adds that they are quite pleased with the fact that the company has been able to deliver 43 per cent profit growth, which is quite phenomenal given the realty that there are a number of cost related challenges.