Mahindra Satyam profit rises 17%

Mahindra Satyam added six new customers during the Jul-Sep quarter

Consulting and information technology (IT) services provider Mahindra Satyam on Tuesday reported a 16.8 per cent rise in net profit of Rs 278 crore for the quarter ended September, compared with Rs 238 crore in the corresponding quarter last year, primarily owing to operational efficiencies. Sequentially, however, net profit plummeted 21.1 per cent.

Revenue stood at Rs 1,938 crore, 22.8 per cent higher than the Rs 1,578 crore in the year-ago period.

“Our strengths in certain key verticals and competencies, combined with increasing client confidence, helped us deliver both revenue growth and operating margins,” said Chairman Vineet Nayyar.

He added despite the Euro zone crisis and the decision-making cycles of customers being extended, the company had reasons to be satisfied, considering the trajectory of growth.

On region-wise performance, Nayyar said, “The US continued to lead the pack, with quarterly growth of 4.4 per cent. Europe followed with 4.2 per cent growth. Growth in other areas was one per cent.”

The manufacturing and banking, financial services and insurance verticals saw 5.5 per cent growth, he added.

The company added six customers in the quarter ended September. Its overall headcount stood at 36,787, a net addition of 791. At the end of the quarter, cash and cash equivalents stood at Rs 3,062 crore.

“Our top 30 accounts continued to drive growth. This clearly indicates the trust and faith our customers reposed on us,” Chief Executive Officer C P Gurnani said, adding despite wage rises, the company had increased its earnings before interest, tax, depreciation and amortisation margins to 21.5 per cent.

The company’s board has approved a total outlay of Rs 500 crore to creating infrastructure at Nagpur, Bhubaneswar, Visakhapatnam, Chennai and Hyderabad, Gurnani said.

“We should be spending about Rs 30 crore a month. The new facilities would create 3,500 seats, and we would do it over a period of 18 months,” he said.