Mahindra Satyam posts flat revenues in first two quarters

HYDERABAD - Mahindra Satyam, formerly Satyam Computer, has posted flat revenues during the first two quarters of the current fiscal year and expects gradual growth in the next two quarters, the company said.

The company posted consolidated profit of Rs.98 crore and Rs.23 crore for Q1 and Q2. The revenues for the Q1 were Rs.1,248 crore and it came down to Rs.1,242 crore in the second quarter, ending September.

The company, however, claimed that it was on the path to recovery and that the growth in the next two quarters would be gradual.

The profit margin was 9.1 percent and 5.2 percent for Q1 and Q2 respectively. Vineet Nayyar, chairman, Mahindra Satyam, told reporters that the profit margin came down in Q2 due to the salary hike to retain the talent pool.

The company, which had a headcount of 28,068 in Q2, hiked the salaries by 15 percent. The company had an attrition rate of 25 percent, which it claims to be similar to that of the IT industry.

Mahindra Satyam, which announced financial results for 2008-09 and 2009-10 in September, plans to recruit 3,000 to 4,000 people in six months. It also has set a recruitment target of 5,000 for next fiscal.

The process of Mahindra Satyam’s merger with parent firm Tech Mahindra is now likely to get delayed. Nayyar said the process may go down to the end of next year. The company has started the consultations with the board members and law firms for the merger.

Nayyar said restating accounts as per US GAAP norms would take another five to six months. “We will then decide whether to re-list on New York Stock Exchange or not,” he said.

The company had delisted from the NYSE in September.

Mahindra Satyam had suffered a net loss of Rs.8,177 crore in fiscal 2008-09 on net sales of Rs.8,813 crore. It had also reported a net loss of Rs.1,250 crore in 2009-10.

The results were announced in September, more than one and half year after Satyam’s founder B. Ramalinga Raju resigned as chairman admitting a massive accounting fraud.

Tech Mahindra bought Satyam in April 2009.