Satyam Q3 net up 29%, ups Q4 guidance

* Revenue Rs 2,195.56 crore; YoY up 32.2%; QoQ up 8.1%

* PAT Rs 433.63 crore; YoY up 28.6%; QoQ up 6%

* EPS Rs 6.48; QoQ up 5.9%

* EBITDA margin for the quarter: 21.46%

* Added 3,424 employees; total: 49,199

* Attrition fell to 13.1% from 13.9 % QoQ

* 32 customers added

* Outlook positive: Increases fiscal year 2008 revenue guidance to $2.1 billion from $2.08 billion

Riding on the back of large outsourcing deals and high-level offshore utilisation, Hyderabad-based IT services provider Satyam Computer Services posted a net profit of Rs 433.63 crore for the quarter ended December 31, 2007 when compared with Rs 337.23 crore during the corresponding quarter - a growth of 28.58%.

Revenues stood at Rs 2,195.56 crore, an increase of 32.17%, from Rs 1,661.12 crore during the same period last year. Its earnings per share (EPS) was Rs 6.48 -- a YoY increase of 26.1% and a sequential increase of 5.9%. The EBITDA (operating profit) margin for the quarter under review stood at 21.46%. Satyam recorded a sequential revenue growth of 10.5% and 50% on a year-on-year basis in dollar terms (US GAAP) during Q3.

"The highlight of the quarter was the continued improvement in all operating parameters. Increased productivity due to higher utilisation, increased billing rates and offshore shift led to improvement in margins to 165 basis points," said chief financial officer V Srinivas. "As such, we are increasing our fiscal year 2008 revenue guidance to $2.1 billion, from $2.08 billion (from 42% growth to 45.2%)," founder and chairman B Ramalinga Raju said.

"We mitigated the currency appreciation through judicious rate increases -- 2.4% for onsite work and 2.3% for offshore projects. These were our most significant increases ever. Additionally, we raised the percentage of our offshore work from 50.4% to 52.1%, which enhanced our operating margin," he added. The volume of work Satyam performed for clients also jumped by 9.4%.

Stating that the company was assessing the slowdown in business in the US, its major market that contributes 60% to its overall business, Raju said the company was closely watching the economic environment, which could have a bearing on its customers. "We, however, will be better prepared for some ground realities during the next financial year," he said.

During the quarter, Satyam added 32 new clients, eight of which are Fortune 500 companies taking its clientele base to 181 Fortune 500 companies. "We have made good progress during the quarter by bagging four large deals in different verticals, each valued at $50 million. We are in pursuit of 21 such big-ticket deals, some of which are from Europe and Asia Pacific," Ram Mynampati, president (commercial and healthcare businesses), Satyam, said. The company hired 3,424 associates in the third quarter with its attrition declining to 13.1% on a trailing twelve months basis.

Govt on mkt crash: Take informed decisions

Responding to the stock market fall today, the government advised investors to take "informed and responsible decisions in the situation and not be led by rumours or any unwarranted apprehensions."

"The fundamentals in the domestic economy are quite strong. Today’s market fall reflects the continuing uncertainties in the global economy and not any change in the fundamentals of the Indian economy," a release issued by the finance ministry said.

Prime Minister Singh said sustained market growth "is our high priority."
He added that fluctuations are due to market forces.

The Bombay Stock Exchange’s Sensex dropped 1408.35 points (7.41%) and the NSE Nifty declined 496.5 points (8.7%) today.

"Most of Asia opened the year 2008 on a weak note with heavy selling pressure seen in most markets. Comparing the major Asian market indices as on January 2, 2008 with their closing today, it is seen that the Straits Times has fallen 14.75%, Hang Sang 13.58% and Nikkei 9.29%. The corresponding figure for the Sensex is 13.97%," the release said.

As regards domestic economic conditions, the just released review of the economy 2007-08 by the Economic Advisory Council of the Prime Minister has estimated the rate of growth of GDP in 2007-08 at 8.9%.

"Corporate profits, as reflected in the third quarter 2007-08 results, continue to be buoyant. Direct tax revenues have shown an increase of 42.8% between April and December. Banks have reported that investments in the pipeline are robust and credit demand is high," the release added.

Textile exports decline in FY08: RBI

The country's total exports may be rising by around 20% but overseas sales of textile, apparel and handicrafts have declined during the first five months of this financial year, according to the Reserve Bank data.

"Exports of textile and textile products and handicrafts continued to register declining trend," RBI said in a study on the country's foreign trade 2007-08.

There was a 3% decline in apparel and 16% fall in silk textile export in dollar terms, it said.

Export of textile and products declined due to reduced off-take by major markets such as the US, the UK and Italy. The country's exports to the US in April-October declined to 3.2% in value terms compared with 6.8% in the corresponding period last year, while in quantity terms the exports recorded a 1.9% growth, according to the US Department of Commerce, Office of Textiles and Apparel.

The Prime Minister's Economic Advisory Council has also pointed out that "absolute declines in cotton yarn, fabric and made-ups, apparel, natural silk textiles and handmade carpets. The decline in the value of exports of such items when measured in India rupee is obviously larger."

The rupee has risen more than 15% in the past year-and-a-half due to huge capital inflows. The appreciation has hit exporters hard, forcing the government to announce packages amounting to around Rs 5,200 crore. The Council had favoured another package for labour intensive sectors such as textiles.

"The impact of the appreciation of the Indian rupee vis-a-vis the dollar and other major currencies has been a major source of concern," the Council had said in its economic review.

Bharti Airtel signs $150 m deal with IBM

Telecom service provider Bharti Airtel today said it had signed a $150 million six-year agreement with global IT major IBM for implementation of IT systems to launch differentiated services in broadband, media, IPTV and DTH segments.

Under the agreement, IBM would bring in its global expertise in areas including the telemedia business, distribution, enterprise segments and business resilience. Bharti would strengthen its distribution and prepaid segment and provide a unified experience to its customers.

To improve customer satisfaction and provide seamless services, IBM would work with Bharti Airtel in areas including LCR (Least Cost Routing), GIS, Auto Discovery, Auto Provisioning and Auto Activation. These applications will help to bring in enhanced efficiencies and cost savings, besides improving service delivery.

The disaster recovery set up and IT architecture would also be be enhanced to provide multi-node redundant systems.