The Hindu : Business : Satyam net profit up 29 p.c.

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Tuesday, Jan 22, 2008
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Satyam net profit up 29 p.c.

Special Correspondent

Acquires U.S. consulting firm for $35 million in an all-cash deal

Hedges 75 p.c. of dollar inflows
Company adds 3,424 associates

— PHOTO: SATISH H.

CONSOLIDATING POSITION: (from left) Satyam Chairman B. Ramalinga Raju, Bridge Strategy President and Senior Partner Stephen E. Sheridian, and Satyam CFO V. Srinivas, after announcing the results in Hyderabad on Monday.

HYDERABAD: Outperforming its guidance, Satyam Computer Services has posted a 32.2 per cent increase in revenues at Rs. 2,195.56 crore in the third quarter ended December 31, 2007, against Rs. 1,661.12 crore in the same period in the previous fiscal. The net profit has risen by 28.6 per cent to Rs. 433.63 crore.

Announcing the results at a press conference here on Monday, founder-chairman of the company, B. Ramalinga Raju, disclosed that the company acquired a Chicago-based management consulting firm, Bridge Strategy Group, for $35 million in an all-cash deal. This would bring in 36 high quality strategy consultants who work across businesses, including financial services, retail, media and entertainment, consumer products and energy, said President of Bridge Strategy Group, Stephen E. Sheridan.

Providing guidance about the business outlook by the end of the financial year, Mr. Raju said the revenue growth would be around 29-29.2 per cent (Rs. 8,368.50-8,379.50 crore or $2.12 billion). Business grew by nine per cent in the quarter under reference.

With its new acquisitions and growth in portfolio of diverse capabilities, the company solidified its position as a leading provider of integrated business transformation services, said Mr. Raju. However, the company was wary about the sub-prime concerns and slowdown in the U.S. economy.

The attrition ratio in the company remained at 13.1, the lowest in the industry. Retention levels were much better at leadership levels, he said. It added 3,424 associates in the third quarter and expected to take the net growth in the number of associates by the end of the financial year to 13,000-14,000. At present, 44,847 employees were working in the company.

Srinivas Vadlamani, Chief Financial Officer, said the company reworked its hedging policy and hedged 75 per cent of dollar inflows (revised from 50 per cent). Thus, the company hedged a billion dollars.

The company had its active acquisition plan in place for right targets.

Ram Mynampati, President and head of commercial and healthcare, said the company had closed four large deals in excess of $50 million and 20 large deals were in pursuit. Interestingly, most of them were not U.S.-centric, but from Europe, West Asia and Asia-Pacific. It added eight new clients taking its total clientele of Fortune-500 companies to 181.

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