Hyderabad: Riding on the gains from a depreciating rupee, Satyam Computer Services Ltd, India’s fourth largest software services firm by revenue, beat analyst expectations while announcing results for the second quarter of fiscal 2009, but the company downgraded its revenue guidance for the full year in dollar terms.
Beating analyst forecasts, Satyam clocked a net profit of Rs580.80 crore for the quarter ended September, equivalent to a growth of 42% over the year-ago period.
An analyst poll had forecast profit growth at around 39.5%. The net profit grew 6% over the previous quarter ended 30 June.
Eight analysts polled by Bloomberg had estimated an average net profit of Rs547 crore.
Satyam’s total income rose to Rs2,819.29 crore in the quarter gone by, up from Rs2,031.72 crore in the second quarter of last fiscal—a growth of 35.3%.
The revenue guidance for the quarter ended 30 September was between Rs2,743 crore and Rs2,769 crore.
The Hyderabad-based firm revised the full-year dollar revenue guidance downwards to between $2.55 billion (Rs12,418.5 crore) and $2.59 billion (Rs12,613.3 crore) implying a growth of 19-21% over fiscal 2008. In June, the company had set a growth target of between 24% and 26%.
“The near term remains challenging, given the context of ongoing financial consolidation, and turmoil in the US and European markets; however, we expect the same process to offer more opportunities for our business transformation services,” company chairman Ramalinga Raju told reporters.
Last week, the country’s second largest software services firm Infosys Technologies Ltd had revised dollar revenue growth forecast for the year, to between 13.1% and 15.2% from 19% and 21%, over slowing business and economic growth in the US.
Fifth ranked HCL Technologies Ltd on Wednesday said its net profit in the September quarter, the first in its 2009 fiscal, gained 16% to Rs356 crore, boosted by the rupee’s depreciation against the US dollar.
The rupee has lost 17.93% against the greenback in this fiscal year.
Boosted by currency gains, Satyam’s rupee guidance has been revised upwards to imply a growth rate of between 33% and 35.4% for the full year.
Satyam set a revenue guidance of between Rs2,945 crore and Rs3,034 crore, implying a growth rate of 4.4-7.6%, which Gaurav Dua, head of research at Mumbai brokerage Sharekhan Ltd, described as “worrisome”.
Keeping in view the “bleak economic scenario” in the US and Europe, the company said it has revised the annual hiring target downwards from the earlier guidance of 14,000-15,000 to 8,000-10,000 for the fiscal year. “The sharply reduced recruitment guidance also shows that the company does not have confidence in growth,” Dua added.
Satyam chairman Raju clarified that there has been no retrenchment as reported in the media and that only about 250 people have left the company in the last quarter as part of the performance improvement programme.
The company has added 33 customers this quarter, taking the total number of active clients to 649.
Satyam’s chief financial officer Srinivas Vadlamani said he expects billing rates to be flat for the rest of the year due to economic uncertainties.
Harit Shah, an equity analyst with Angel Broking Ltd, said Satyam’s results were within the broader industry trend. On the company revising downwards the dollar revenue guidance, for instance, he predicted, “Most companies will cut forecast in the current (business) environment.”
Tata Consultancy Services Ltd, India’s top ranked software services firm by revenue, and Wipro Ltd, placed third in the industry, announce results on 22 October.
Shares of Satyam lost 2.6% to close at Rs265.95 each on Friday, on a day when the Bombay Stock Exchange’s information technology index shrunk by 4.94% and the bourse’s benchmark index, the Sensex, fell 5.73%.
K. Raghu in Bangalore contributed to this story.