It was hit by the biggest corporate fraud in 2009 when under founder Ramalinga Raju. Mahindra Satyam [erstwhile Satyam Computer Services] now seems to be on a clear recovery path under the new owners the Mahindras.
The company’s second quarter consolidated net profit jumped ten-fold year-on-year to Rs 238.24 crore, much ahead of street estimates, helped by strong demand for outsourcing services and the depreciation in rupee in recent months.
Income from operations in July-September was up 27% from a year ago to Rs 1,577.71 crore, the Hyderabad-based company said on Thursday.
On a sequential basis, net profit was up 6%, while revenue rose 10%, compared with the April-June quarter.
Ramalinga Raju and brother Rama Raju were arrested in a multi-crore accounting fraud in 2009, after Raju admitted that he had fudged the account books and overstated Satyam’s assets for years. Both the brothers were granted bail by the Supreme Court last week.
Mahindra Satyam, now owned by Tech Mahindra , says it is nearing the end of its transformation and is clearly on the growth path, despite the current global macroeconomic challenges.
"Our growth momentum continues for the fifth consecutive quarter. As we come towards the end of our three-year transformation journey, it is indeed satisfying to see that all our key business performance indicators such as growth, profitability and talent retention are on course. We have shown significant improvement quarter-on-quarter, in spite of an uncertain macro-economic environment," said Chairman Vineet Nayyar.
Mahindra Satyam added 36 new customers in the second quarter, including three Fortune 500 companies. It had 32,092 employees as of September 30, having net added 654 employees in July-September. Attrition was down to 15.6% during the quarter, it said.
"Our emphasis on differentiation and scaling up our market share through verticalized solutions is bearing fruit. Investments into emerging areas such as enterprise mobility and smart grid are gaining momentum," said CEO CP Gurnani.
Meanwhile, Mahindra Satyam has said its ADS [American Depository Shares] programme is expected to be wound down by March 2012. Satyam’s ADS were delisted from the New York Stock Exchange following the accounting scandal, but continued to be traded on the OTC [over-the-counter] market in the US.
Mahindra Satyam had announced in August this year that it will wind down the ADS programme following the failure to conform accounts to US regulatory requirements.
Satyam shares ended up 0.6% at Rs 73.05 on NSE on Wednesday. The stock is up 11% so far this fiscal, outperforming the broader IT index, which has shed 12.8% amid the debt crisis in Eurozone and economic slowdown in the US.
Source: www.moneycontrol.com
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DENIP Consultants Pvt Ltd
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