Business Standard

Q2 Results Watch: Satyam net seen down 16%

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BS Research Bureau Mumbai
Indian software services companies are likely to show healthy numbers for the quarter ended September 2006 on account of the current strength in demand for offshore services.
 
According to a research report issued by JM Morgan Stanley, volume growth should remain strong and margins for most companies should expand given that wage increases and visa charges were incurred in the June quarter.
 
"Infosys Technologies is expecting strong growth with Q/Q revenue growth of 9.2% and 44% YoY basis. Operating profit is expected to grow 12.8% Q/Q and 38% YoY, and net profit is likely to move up by 5.8% Q/Q and 38% YoY.
 
"TCS is likely to witness continuing momentum after 3 quarters of 8% QoQ revenue growth. For the September quarter, revenue is expected to grow 7% (40% YoY), operating profit at 14.6% (30% YoY) and net profit at 8.1% (35% YoY).
 
"Wipro is likely to witness better quarter after registering low volume growth in the past compared to peers due to client issues. For September quarter, Wipro's revenue growth is expected to be 8.5% (41% YoY), operating profit at 7.3% (41% YoY) and net profit 5.4% (37%).
 
"Satyam Computer could be the lame duck among its peers with revenue growth expected to be 7.6% Q/Q (35% YoY). Operating profit should decline due to wage increases from July 20007 to 2.4% Q/Q (up 30% YoY), and net profit is expected to be down 15.9% Q/Q (up 26% YoY)," the report said.

 
Sep-06: Earnings Estimates and Key Factors
Company (Rs mn)Sep-05Jun-06Sep-06EQoQYoYMagmt Guidance
INFOSYS
Revenue2294030150329339.20%44%32800
OP63707800879812.80%38%-
OPM (%)27.825.926.7

85 bps

-105  bps

-
Net Income6060794083575.30%38%8232
TCS
Revenue3156641443443357.00%40%-
OP816992651062114.60%30%-
OPM (%)25.922.424

160 bps

-192  bps

-
Net Income6903862693228.10%35%-
WIPRO
Revenue1887624513265888.50%41%26773
OP4500591163407.30%41%-
OPM (%)23.824.123.8

-27 bps

1 bps

-
Net Income4704610364325.40%37%-
SATYAM
Revenue1155014429155317.60%35%15290
OP241731883111-2.40%29%

-

OPM (%)20.922.120

-207 bps

-89  bps

-

Net Income237335412979-15.90%26%2889
HCL TECH
Revenue ($ mn)2212722896.10%31%-
OP ($ mn)394949-0.50%25%-
OPM (%)17.61816.8

-113  bps

- 78 bps

-
Net Income ($ mn)385149-3.70%28%-
Note: Wipro management guidance is translated to INR using Morgan Stanley's estimates for the exchange rate.

 

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First Published: Oct 04 2006 | 12:00 AM IST

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