The Hindu : Business : Satyam Computer beats revenue guidance

Online edition of India's National Newspaper
Friday, Jul 23, 2004

Business

Business

Satyam Computer beats revenue guidance

By P. Vikram Reddy

HYDERABAD, JULY 22. In tune with the trend set by other IT majors, Satyam Computer Services beat the revenue guidance for the quarter ended June, and simultaneously revised upwards the guidance for the rest of the year. An elated Ramalinga Raju, the Chairman, felt that with the U.S. economy registering higher growth and employment levels, and marginal increase in IT spend, concerns on outsourcing were less and `outlook favourable'.

Revenue from software services was Rs. 771.50 crores for the first quarter against the guidance of Rs. 728 crores to Rs. 732 crores. This reflected a sequential growth of 7 per cent and 37.8 per cent over the corresponding period last year.

For the full year, the revenue guidance has been revised to Rs. 3,268 crores to Rs. 3,312 crores, a growth of 28.6 per cent to 30.3 per cent, against the earlier guidance of 21.9 per cent to 23.8 per cent. Mr. Raju said that the net profit at Rs. 173.48 crores indicated a growth of 43 per cent year-on-year.

New markets

The EPS for the quarter is Rs. 5.48 against the guidance of Rs. 4.78. Guidance for EPS this year is Rs. 21.71 to Rs. 22.06, indicating a growth of 26.2 per cent to 28.3 per cent. Earlier, the guidance was 17.9 per cent to 19.88 per cent growth. Satyam added 25 new customers in the quarter, and revenue from North America was less than 69 per cent, implying a tilt to other markets such as Europe.

Incidentally, the revenue for the quarter was more than the company's total revenue for 2000, leading Mr. Raju to point out that the market was buoyant then the last four years have been more significant for the IT industry than one realises. However, other income this quarter showed an extraordinary high of Rs. 30 crores (from currency fluctuations), compared to Rs. 10 crores in the corresponding period last year, and only Rs. 5 crores for March 2004.

Investment plans

Giving details at a press conference here on Thursday, Mr. Ramalinga Raju said about Rs. 150 crore investment was being planned in expansion activities this year, which includes opening a `nearshore' development centre in Budapest (Hungary) to cater to the needs of European operations.

Additional facilities will be created in Hyderabad, and operations will be started in West Bengal also.

On acquisitions, he said "We are evaluating few options for inorganic growth (through acquisitions), in line with our plans to enhance some of our competencies".

The guidance for recruitment this year is about 4,000 professionals. He said 1,600 have been added so far this year.

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