Mahindra Satyam’s Q3 PAT grows two-fold, sequentially

In what could probably be the first sign that things are beginning to improve under its new owners, Mahindra Satyam, the erstwhile Satyam Computer Services which was hit hard by the worst accounting scandal in corporate India’s history that came to light in January 2009 and was subsequently acquired by Mahindras in April 2009, has posted robust profit growth, on a q-o-q basis, in the just concluded December quarter of the financial year 2010-11.  The Mahindras-owned technology company registered a sequential growth of 152.8% in its consolidated net profit to Rs 58.9 crore in Q3FY11 compared to Rs. 23.3 crore in the immediate preceding quarter i.e., Q2FY11. Although the company’s net revenue grew by just 3% to Rs 1,279.3 crore from Rs 1,242 crore, during the said period.

Yet the results are encouraging given the fact that the company had reported a net loss of Rs 1,250 crore for the FY’10.

“Our efforts of investing in core competencies have begun to show encouraging results. The recognitions that we have received from our partners are true reflections of our inherent capabilities... Mahindra Satyam is geared up for a promising year of growth and opportunities,” said Vineet Nayyar, Chairman, Mahindra Satyam.

CP Gurnani, CEO, Mahindra Satyam, said, “Our key operating metrics are showing an upward trend, and are clear indicators of the improving health of the company. Our recent client wins and rejoining of senior leaders are clear testimony of the Mahindra Satyam promise. We believe that our resilience in meeting business goals with an enhanced focus in strengthening our competencies will ensure that we continue to add significant value to all our key stakeholders.”

The company had 217 clients while its total employee strength stood at 28,832, as at end-December 2010.

Financial Highlights

Financial Highlights under Indian GAAP Consolidated for the Quarter ended December 31, 2010:     * Revenue was INR 1,279 crores, up 2.97% QoQ     * Operating Profit (EBITDA before exceptional items) was at INR 82 crores     * PAT was at INR 59 crores (after exceptional items), up 153% QoQ     * EPS (after exceptional items) of INR 0.50 in Q3 as compared to INR 0.20 in Q2 Other highlights for the Quarter ended December 31, 2010     * Consolidated Headcount as on 31st December 2010 was 28,832, up by 764 from 28,068 as on 30 September 2010     * Customer count has gone up to 217 in Q3     * Consolidated cash and cash equivalents were at Rs 3,048 crores, up from Rs 2,996 crores in Q2 FY 11

Source: Mahindra Satyam