Mumbai: Mahindra Satyam plans to appeal against an order by the I-T department over the attachment of some of the company’s properties.
“As far as the income tax attachment order is concerned, the (Andhra Pradesh) high court has stayed any action on it, so we’re going to go back to the high court to appeal against that order,” Sonjoy Anand, chief financial officer, said Wednesday on the sidelines of parent Tech Mahindra Ltd’s fiscal third-quarter earnings, which saw a 15% sequential rise in net profit.
Growth track: Tech Mahindra CEO Vineet Nayyar says this has been a satisfactory quarter despite a challenging environment. Kumar/Mint
Mahindra Satyam said in an exchange filing last Friday that the company had received a provisional order from the I-T department attaching land and buildings. The notice came after the taxmen failed to encash bank guarantees of Rs 617 crore valid until 31 December, 2011, provided by Mahindra Satyam in keeping with an order by the Supreme Court in April. In an interim order dated 31 January, the Andhra Pradesh high court directed both Mahindra Satyam and the I-T department to maintain status quo until it heard the issue on 28 February.
Tech Mahindra took over the erstwhile Satyam Computer Services Ltd after offering the highest bid in a government auction and renamed the company Mahindra Satyam. It holds a 42.65% stake in the company.
Meanwhile, Tech Mahindra reported net profit of Rs 276 crore for the October-December quarter compared with Rs 240.5 crore in the July-September period. Revenue rose 8.4% to Rs 1,444.9 crore from Rs1,333.3 crore. Profits were driven by a 23% drop in depreciation costs to Rs39 crore and a 25% fall in tax provisions to Rs29.4 crore.
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Sonjoy Anand of Tech Mahindra says third quarter earnings have been steady and the coming year could prove to be better for the IT sector.
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“This has been a satisfactory quarter despite a challenging environment. The European sovereign debt crisis coupled with this turning into a period of low or no growth has changed client behaviour,” said Vineet Nayyar, vice-chairman, managing director and chief executive of Tech Mahindra. He added that decision-making cycles were getting longer and expected information technology spending by Western clients to be flat to slightly lower though demand for offshoring remained robust.
Indian information technology services lobby group Nasscom on Wednesday estimated that aggregate revenue for the country’s IT-BPO sector will cross $101 billion in the current fiscal year ending 31 March 2012, with exports growing by 16.3% to $69 billion. It expects export revenue to slow to 11-14% growth, while domestic revenue is tipped to grow 13-16% in the next fiscal year.
Earlier this month, market research firm Gartner forecast 2012 global spending on information technology will grow at the slowest pace in three years, as Europeans cut back on investments. Gartner expects global IT spending to rise 3.7% in 2012, down from its earlier estimate of 4.6%. The forecast for Western Europe was slashed to a 0.7% drop in spending, from a previously expected rise of 3.4%.
john.k@livemint.com