Mahindra Satyam, the erstwhile Satyam Computer Services, on Monday said its third-quarter consolidated net profit more than doubled sequentially on better employee utilisation, sending its shares soaring. Consolidated net profit for the three months to December rose to Rs 58.9 crore from Rs 23.3 crore in the second quarter.
Revenues grew three per cent to Rs 1,279.3 crore from Rs 1,242 crore. While operating profit before exceptional items stood at Rs 82 crore, operating margin rose to 6.4 per cent from 5.9 per cent. Exceptional items were on account of impairment of subsidiaries and its earlier merger and acquisition commitments. Mahindra Satyam shares closed 11.6 per cent higher at Rs 64.65 on the Bombay Stock Exchange.
“Overall, there’s a marginal improvement in profitability and we are headed in the right direction. There were high expectations, but it has been a reasonably good performance,” C P Gurnani, chief executive of Mahindra Satyam, said.
The Hyderabad-based company has the Company Law Board approval exempting it from publishing quarterly numbers between December 31, 2008 and March 31, 2010. So, the company did not give corresponding quarterly and nine-month figures of the previous financial year.
Tech Mahindra bought Satyam in April 2009, and has since been operating it as an independent company. It had reported a net loss of Rs 1,250 crore for 2009-10, giving a first view of its financials almost two years after founder B Ramalinga Raju admitted to cooking the company’s accounts for years. In January 2009, Raju confessed to perpetrating a multi-crore scam, wherein the company’s profits were overstated and its assets falsified.
Gurnani said the attrition rate at 25 per cent continued to be one of the major concerns for the company, while human resources-related expenses continued to eat away profits.
