Mahindra Satyam has reported a 74% fall in net profit at R79.98 crore for the third quarter compared with the year-ago period when it recorded R308.43 crore as profits, due to a one-time settlement with Aberdeen of UK. Barring the exceptional loss, net profit stood at R374 crore, up 34.53% compared with R278 crore in the previous quarter.
?The decline in net profit was on account of an exceptional charge pertaining to the Aberdeen UK claim settlement, which was reflected in the financial statement. After resolving the Aberdeen issue, we have put to rest all litigations external to India and will focus more on business-ready solutions,?? Vineet Nayyar, chairman, said.
Satyam had paid $68 million to Aberdeen Global and other funds to fully settle claims related to an accounting scandal when it was run by Ramalinga Raju.?
On December 12, 2012, the company had entered into a confidential settlement agreement with Aberdeen Global, Aberdeen Asset Management and its subsidiaries. By virtue of the settlement, an amount of R369.04 crore, has been expensed and disclosed as an exceptional item with an amount of R75 crore being reversed from provision for contingencies during the quarter ended December.
Nayyar said that policy actions has lowered the risks of any major disruptions in the global markets. ?These measures have supported a modest pick-up in growth. However, full recovery will be a long and slow process, especially in the Euro Zone,? he said, adding that decision-making cycles would continue to be prolonged as in 2012, as customers closely monitored the markets and were cautious on the spending pattern.
Total income increased from R1,869.35 crore to R2,050.61 crore in the same quarter. The consolidated revenues increased marginally to R1,939.5 crore from R1,938.4 crore during the same period. Ebitda margins increased to R418 crore from R417 crore quarter-on-quarter. The EPS stood at R3.18 per share in Q3.
?We will continue to look for strategic acquisitions and strengthen our industry and alliance partnerships,? CP Gurnani, CEO, said. On the merger, he said, ?The merger process of Mahindra Satyam and Tech Mahindra was at the penultimate stage and was expected to close soon. We will operate as a combined company in the near future. In fact, de facto, we are already doing that. We have made good progress in terms of integration on multiple fronts like system consolidation, process and policy alignment. Our joint go-to-market models are evolving with our customers? needs.?
The company has $256-million outstanding contracts and sees the quarter as stable. On mergers and acquisitions, Gurnani said that it is part of the company?s strategy and will look at acquisitions in Europe and Australia, with focus on areas like engineering services, BFSI and healthcare.
?We are not shy to looking at acquisitions. We are hopeful that our acquisition strategy will consume some part our cash (R3,311 crore as of December 2012). If it buyout is strategic and if it makes sense, the size will not come in our way,? he added.
Co to add employees in US
Hyderabad: Mahindra Satyam is planning to ramp up its employee workforce in the US, which contributes about 53% of its revenues. It will strengthen both its sales force as well as its technology teams by hiring local professionals besides setting up near shore centres in smaller cities of the North America. ?Currently in sales department, locals comprise about 10-12% and we intend to increase this to approximately 15%. Similar ramp up will take place for technical professionals too,? Lakshmanan Chidambaram, head, North America, said. The company has a workforce of about 5,000 in the US as of December, 2012.
