Satyam Computer Services, the fourth largest IT services company in the country, has reported first quarter results, which have exceeded expectations on bottom line growth. Volume growth was in line with industry trend, but the company benefited considerably from the decline in Rupee value.
For the quarter ended 30 June, 2006, Satyam has reported an 86.18 per cent rise in consolidated net profits to Rs354.12 crore from Rs190.2 crore for the previous year quarter. Consolidated revenues were higher by 40.23 per cent at Rs1,517.41 as compared to Rs1,082.12 crore for the prior year quarter.
Operating revenues increased 36.29 per cent to Rs1,442.93 from Rs1,058.7 crore. Revenues from IT services went up 34.67 per cent while BPO revenues increased substantially nearly tripled to Rs28.71 crore on a year-on-year basis.
On a sequential basis, operating revenues has gone up by 9.84 per cent from Rs1,313.62 crore for the previous quarter ended 31 March 2006. Sequential growth in net profits is 24.41 per cent when compared to March 2006 net profit of Rs284.65 crore.
Other income increased substantially to Rs74.48 crore during the quarter from Rs23.42 crore for the pervious year quarter and Rs28.89 crore for the March 2006 quarter. Other incomes were higher as the company realised Rs44.7 crore as foreign exchange gains during the quarter as compared to a loss of Rs4.83 crore for the previous year quarter.
Operating profits increased 47.49 per cent year-on-year during the quarter and 6.14 per cent sequentially. Operating margins, excluding other income, as a percentage of IT revenues improved to 24.6 per cent from 22.74 per cent for the previous year quarter. However, operating margins declined on a sequential basis from 25.46 per cent for the March 2006 quarter.
Staff costs went up by 30.13 per cent on a year-on-year basis while other operating expenses increased 43.03 per cent. The BPO division continued to make losses at the operating level, even though the extent of losses has come down considerably.
In terms of geographies, reliance on North America continues to be significantly higher than the other large IT services companies. Revenues from North America formed 64.29 per cent of total revenues during the quarter as compared to 66.38 per cent for the previous year quarter. Europe contributed 18.96 per cent as compared to 17.77 per cent during the year ago quarter.