Volumes Crucial For Satyam

However, despite the healthy growth in the bottomline, the Satyam scrip reacted by Rs 28 to Rs 340 from an intra day high of Rs 368. The scrip has more than doubled from the level of Rs 155 in February. Speculators booking profits at current levels could explain the reaction in scrip price.

Net profit growth would have been lower at 28 per cent, if one were to exclude a one time income (Rs 12.28 crore) from the divestment of 24 per cent stake in its joint venture with Dun & Bradstreet Corporation, USA to its collaborator.

On the other hand, Satyams net profit was eroded by Rs 11.36 crore due to charging of higher rates of depreciation and a full write-off of miscellaneous expenditure.

 

The doubling up of software exports to Rs 178.11 crore aided overall income growth of 111 per cent. This is substantially higher than the 67 per cent growth attained in 1996-97. Analysts attribute the improved growth to good response to Satyams solution for Y2K problems: a package called SOS 2000. Also, volumes increased due to addition of around 1,000 software professionals in the previous year.

Apart from the major incentives to attract and retain skilled manpower in large numbers, in the current year Satyam started valuing its human resources. Analysts feel that with Satyams overdependence on low-risk, low-value-added software products, its future growth will depend on volumes. This, in turn, depends on additions to its skilled manpower and controlling employee attrition.