Satyam Computer Services Ltd., the software exporter embroiled in India’s biggest corporate fraud probe, reported its first quarterly earnings in almost two years, ahead of a merger with Tech Mahindra Ltd.
Profit fell 76 percent to 233 million rupees ($5.2 million) in the three months ended September from the previous quarter ended June, Hyderabad-based Satyam said in a statement to the National Stock Exchange today. The company last announced quarterly earnings in December 2008.
Satyam, whose former Chairman Ramalinga Raju disclosed in January 2009 that he overstated the company’s assets by $1 billion, will be absorbed by its largest shareholder, Tech Mahindra Ltd., within a year of announcing numbers for the quarter.
“Clients are asking for discounts,” said Rahul Jain, an analyst with Dolat Capital Market Ltd. in Mumbai. “You are seeing lots of deal wins, but the revenue and rate is not up to the mark.” Jain has a “neutral to negative” rating on Satyam and an “accumulate” rating for Tech Mahindra.
Sales in the three months fell to 12.4 billion rupees from 12.5 billion rupees in the quarter ended June, according to the statement.
Satyam “has been in critical ICU for almost a year,” said Chairman Vineet Nayyar at a press conference in Hyderabad. “The good news is that most of the damages inflicted on this company have now been repaired, but that doesn’t mean it has recovered.”
Raju and five company executives surrendered before a trial court in the southern city of Hyderabad Nov. 10 after India’s Supreme Court canceled their bail, the Economic Times reported at the time, without saying where it got the information.
Many clients “put us on hold, waiting for us to come out with results,” said Chief Executive Officer Chander Prakash Gurnani at the press conference. “Now, we should aggressively go back to our lost customers.”
Satyam dropped 1.7 percent to 84.25 rupees at the 3:30 p.m. close of trading in Mumbai, before the earnings announcement. That compares with a 0.8 percent advance in the benchmark Sensitive Index, or Sensex. The stock has fallen 14 percent this year, underperforming the Sensex’s 16 percent advance.