Mahindra Satyam still in the red

Mahindra Satyam (the former Satyam Computer Services) reported a consolidated net loss of Rs 327 crore for the quarter ended March 31, on account of exceptional expenditure, including payments made to settle issues in the US with the market regulator, the Securities and Exchange Commission (SEC), and with Upaid Systems.

Sales stood at Rs 1,375 crore in the January-March quarter. It incurred an expenditure of Rs 571 crore related to restructuring, forensic investigation and litigation support, class action settlement consideration and provisioning for impairment losses in subsidiaries.

Last year, the Company Law Board exempted Mahindra Satyam from publication of financial results for the quarters ending between December 31, 2008 (just before the revelation that its former management had been falsifying accounts for years) and March 31, 2010. Hence, the corresponding quarterly figures for the previous year were not provided.

There was an exceptional loss for the period under review of Rs 571 crore. This loss was attributed to the settlement of various class action suits. During the quarter, Ebitda (earning before income, tax, depreciation and amortisation) margins doubled to 13 per cent from 6.4 per cent a quarter earlier, though still lower than the 20-plus per cent margins reported by domestic rivals TCS, Wipro and Infosys.

“It will take at least 17 to 18 months for us to reach the industry level,” Mahindra Satyam chairman Vineet Nayyar told journalists here today. For the full year ended March 31, the consolidated net loss increased to Rs 147 crore from Rs 124.6 crore during the same period last year. Income from operations declined to Rs 5,145 crore during the January-March period from Rs 5,481 crore in the same year-ago period.