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Hyderabad-based IT and consulting services company Mahindra Satyam reported a 15 per cent decline in net profit to Rs 454 crore for the quarter ended March, 2013, as compared with Rs 534 crore in the corresponding quarter last year.
The decline is largely because of the differential treatment given on the tax front between the two quarters. While Mahindra Satyam made a tax provision of Rs 75 crore this time, it had availed of a Rs 94-crore tax deferment in the corresponding quarter last year. Total revenues grew 15.47 per cent to Rs 2,008 crore in the quarter under review as compared with Rs 1,739 crore in the corresponding previous quarter.
The company could also improve the gross profit margin to 20.1 per cent from 17.5 per cent in the year ago period.
During the year, revenues, including the other income, grew 17.54 per cent to Rs 8,011 crore from Rs 6,815 crore in the previous year.
The net profits of the two comparable quarters had an addition of Rs 134 crore and Rs 109 crore respectively, written back from the earlier provisions towards assumed losses when the company was taken over by Mahindra.
With the right back of earlier provisions and by declaring a dividend of 30 per cent to the shareholders during the quarter under review, the company said the turnaround of the firm was complete. “We are announcing a dividend this year, which is in many ways symbolic and significant. Hopefully, the long wait of the shareholders for this moment is over,” Vineet Nayar, chairman of Mahindra Satyam, said.
For the full year ending March, 2013, the company's net profit stood at Rs 1,164 crore, a decrease of 10.9 per cent over Rs 1,306 crore in the previous year even though the profit before tax grew 14.8 per cent, as the tax provision stood during the year stood at Rs 412 crore as compared with Rs 85 crore in the previous year.
Overall, the company said North America, which contributes about 55 per cent to the revenues, showed a reasonable growth of 9 per cent during the last financial year while Europe witnesses a negative growth to the extent of 6 per cent. In terms of performance of various verticals, manufacturing and media & entertainment grew 9.9 per cent and 1.5 per cent respectively. Other areas like retail and transport reported negative growth, said C P Gurnani, CEO of Mahindra Satyam.
Responding to a question, the company chairman said the amalgamation of Mahindra Satyam and Tech Mahindra was imminent as he was expecting a favourable judgement by the Andhra Pradesh High Court next month. The company also expects some level of impact from the proposed US immigration Bill and has prepared itself to adjust to the new regulatory environment upfront, according to him.
Though Mahindra Satyam had been invited to participate in all the large deals, the conversion ratio in terms of clinching the deals, had been very low, said Gurnani, adding corrective measures, including improvement in salesforce, were under way.
