Satyam unperturbed by the $b club

HYDERABAD: Announcing Q4 results of NYSE listed Satyam Computer Services Limited, Chairman Ramalinga Raju emphasized that the company is looking at growing its market value, and gaining access to geographies.

"Reducing dependence on few clients and geographies is on the radar and building domain and technology competencies is the way to go," elaborated Raju. Announcing a dividend of 200 percent against 150 percent last year, Raju closed the fiscal year ending March 31,2004 at Rs 2,541.55 crore ($553m) in revenues. Satyam recorded 25.59 per cent growth (32% in US terms) which is more than twice the growth rate of fiscal 2003.

The company added 30 customers in Q4 taking the total customer additions to 108 in fiscal 2004. The net addition of associates stood at 1,685 including 1145 new employees.

Rupee appreciation hits in Q4

Revenues from software services in Q4 stood at Rs 725.70 crore exceeding the company guidance of Rs 690 crore to Rs 700 crore. Year-on-year income from the software services for Q4 was up to 33.85 per cent and the net profit has increased by 21.64 per cent. However, earnings per share declined to Rs 4.64 in Q4 from Rs 4.63 in Q3 largely due to appreciation of the rupee and the resultant exchange loss.

Riding on crossing the 100 mark in Fortune 500 customers the forecast for according to Raju, though rupee appreciation continues to be a cause of concern a diversified, derisked portfolio of verticals, services and geographies helped Satyam arrive at a good sequential growth of 8.75 per cent over the quarter ending December 31, 2003. "Our focus on competency enhancement and relationship management has been a key factor in growing existing accounts as well as acquiring new accounts," said Raju adding that telecom and BFS contributed largely to the growth in Q4.

Forecast 2005

The fiscal 2005 gives a guidance of 28-30 per cent growth. "The combined revenue base of the company’s 101 Fortune 500 customers is over $4 trillion and the linkages resulting in opportunities for growing our business with them are huge," said Raju.

The company is closely working with a team on investment bankers looking at acquisitions, which will give Satyam access to geographies. Backlash on offshore outsourcing has not had a significant adverse impact on the business, informed Raju citing encouraging reports from US industry associations and economic analysts. The company has put the EPS for the coming year in the range of Rs 20.28 and Rs 20.62.

Satyam’s BPO subsidiary Nipuna reported a revenue of $2.23 m and the forecast of $12m in fiscal 2005 will be met by significant ramp up in Bangalore and Hyderabad, said Raju.

With two new customers in Q4 Nipuna ended its first full year of operations with 10 active customers. Operating in the areas of healthcare, insurance, IT help desk, finance and accounts, customer contact and data management it has a total employee base of 503. While the Hyderabad infrastructure has been boosted to 550 seats an addition 350 seat facility will be operational in Bangalore by May 2004.

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