Satyam results beat market expectations

Mumbai: Indias leading domestic software company Satyam Computers has beat market expectations by posting a 100.3-per cent growth in net profit in the second quarter ended September 2001.

The board of directors of the company also recommended an interim dividend of 25 per cent for the financial year 2001-02. The New York Stock Exchange-listed company has posted a rise of 100.3 per cent in net profit to Rs 134.08 crore, compared to the Rs 66.94 crore in the corresponding period last year.

The total income for the quarter ended 30 September 2001 rose by 59.7 per cent to Rs 453.50 crore from the Rs 283.92 crore in the corresponding quarter in 2000. The growth in net profit is far above analysts expectation. The market was expecting that the companys net profit would in the range of Rs 115 crore to Rs 125 crore for the quarter ended 30 September 2001, a gain in the range of Rs 75 to 85 per cent.

The companys sales also beat the expectation. The company has announced a 59.7 per cent rise in total income to Rs 453.50 crore from the Rs 283.92 crore in the corresponding period last year. The company, in the last 10 trading sessions on expectation of good Q2 results, had rose by 36.5 per cent to Rs 162.35 on 23 October 2001 from Rs 118.95 on 10 October 2001.

The analysts were of the opinion that the company may achieve its projected growth target for the financial year 2001-02. They felt it might show a growth of 40 per cent in the topline and around 47 to 48 per cent in the net profit for 2001-02. Nevertheless, they were of the opinion that the next quarter (October -December 2001) would prove quite tough for the company, as there may be some delay in finalising overseas orders apart from the possibility of losing existing clients.

Satyam, which derives the majority of its revenues from the US, said its profit rose to Rs 134 crore from Rs 66.9 crore a year earlier, as it added 24 new clients in its second quarter. Earnings per share of the company increased to Rs 4.24 from Rs 2.38, while the total income rose 60 per cent to Rs 453 crore.