Satyam posts 31 per cent YoY revenue growth

Hyderabad, Jan 19 (UNI) With its operating margins up 205 basis points sequentially and riding on 8.2 per cent strong volume growth, Satyam, India's fourth largest IT Software company, today posted Rs 337.23 crore net profit from Rs 1661.12 crore business for the quarter ended December 31, 2006.

The company, which announced the audited results for Q3, said its revenue from software services in the Q3 was up 31.3 per cent on a YoY basis and 3.70 per cent sequentially. the revenue for the current year was expected to be in the range of Rs 6434 crore and Rs 6442 crore.

The corresponding annual growth rate was expected to be 34.3 per cent - 34.4 per cent. Its operating margins improved 205 basis points sequentially on the back of operational efficiencies and increasing offshore. The Net Profit, at Rs 337.23 crore, indicates a YoY growth of 25.02 per cent. EPS for the quarter at Rs 5.14 shows a YoY growth of 23 per cent. EPS guidance for the year was revised upward to Rs 20.90, from the earlier estimates of Rs 20.73 to Rs 20.81.

The company's founder Chairman B Ramalinga Raju said ''this translates into a 3.7 per cent growth in rupee terms under consolidated Indian GAAP. The growth differential is in view of the 3.7 per cent rupee appreciation against the US dollar in Q3''. The revenue growth was accentuated by a 11 per cent offshore volume increase.

A significant positive development in Q3 performance was the expansion in EBITDA margins by over 200 basis points on account of enhanced efficiencies and reduction of delivery cost''.

Consequently, EPS at Rs 5.14 was higher than the guided figure of Rs 5.11.

The company, he said expects to clinch atleast one or two major deals in the range of USD 100-200 million over the next few quarters. Currently its Strategic Deal group is negotiating on 10-15 deals. IT also expects to renegotiate on the prices indicating it could increase the price over the next few years. The company will from the fourth quarter offer stock options to ''senior'' leadership associates.

Mr Raju also announced that Nipuna, its BPO subsidiary, will become a hundred per cent subsidiary by May 2007 as Satyam intends to buy out the current investors holding 25 per cent stake with about USD 35-40 million.

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