For the three months to the end of December, the Hyderabad-based company made revenue of $375.6m, generating net profit of $71.2m, down from $93.1m a year ago, though this compares it with a quarter in which it received 35.9m from the proceeds of its sale in Sify. Stripping out the sale, net profit increased 24.3%.
Satyam’s revenue and earnings growth are significantly lower than those of its rivals which have reported so far. The company’s chairman, B Ramalinga Raju, told Computer Business Review that while the numbers were below the numbers from TCS and Infosys, the criticism of its results was unfair. People are reacting purely by what appears to be, not by what is, he said, adding that there were other metrics that should be taken into account, such as its improving margins, lower attrition rates, and a significant increase in offshore volumes. He also said that as its growth was higher than its rivals in the last fiscal year, it was more difficult for Satyam to continue to attain those levels.
In July Satyam paid its workers an average wage increase of 18%, which while costly has helped it reduce attrition levels to 17.3%. We are pleased with the trend but not the number. Clearly there is a lot more room for improvement, though compared to what is happening at our competitors, it’s very positive, said Raju.
Raju again rebuffed speculation that Satyam is looking to be acquired. We had vehemently denied having considered such an option directly or indirectly ever in the past, he said in a statement. We would like to take this opportunity to put to rest any such speculation in the future. We firmly believe that enhancement in shareholder value is best when we continue to pursue the already successful global delivery model that we specialize in. Satyam, therefore, shall not indulge in any such pursuits of being acquired.
Satyam also looks set to take full ownership of its BPO subsidiary Nipuna. It has reached an agreement with its investors which gives it the option to buy out the remaining stake for between $35m and $45m by May 2007. Nipuna is expected to generate revenue of $37m in its current fiscal year.
