Satyam Results - Excerpts

By admin, April 25, 2007 1:44 pm

Satyam recently announced results, Below are some excerpts from the same:

For fiscal 2007, Satyam recorded 33% YoY revenue growth vs. its original 25% guidance,

Revenue growth was driven by the Technology vertical (up 63% YoY to 22% of the total), Consulting and Package Implementation practice (48% and 43%) and European region (46% and 20%).

Top-client GE contributed 6% of revenue vs. 8% a year ago. Operating income of $81.0 million (19.7% margin) surpassed our $75.6 million estimate (19.0% margin).

Profitability on a QoQ basis was hurt by rupee appreciation (1.5%) and new stock compensation expenses - offset partially by improved offshore revenue-mix, utilization and billing rates.

Available levers for countering salary- related pressures (~400 bps in fiscal 2008) and rupee appreciation (200 bps) include pricing (200 bps), offshore revenue-mix (1% swing = 30+ bps), ramp-up of the BPO and other subsidiaries (25 bps), lower-cost campus recruitment and operational efficiencies.

Hourly billing rates averaged $56.80 for onsite work (up 1% QoQ and 2% YoY) and $23.30 for offshore (up 1% QoQ and YoY).

Billed volume rose 9.5% QoQ.

Offshore utilization (excluding trainees) stood at 78.4% vs. 79.9% a year ago.

High-margin offshore work contributed 50.6% of IT Services revenue vs. 48.9% in the December quarter - a reflection of client comfort and suitability of newer services for distributed delivery.

Excluding BPO, headcount rose 3.7% QoQ and 35% YoY to 35,670 in March.

Hiring plans call for the (gross) addition of 14-15K associates in fiscal 2008, unchanged from the prior year. Attrition, which includes a 3-5% involuntary component, improved to 15.7% from 17.6% in 3Q07 and 19.2% a year ago. With career development programs and early/empowered leadership, Satyam is targeting a 10-12% range.

Source: 1

Prashanth Rai

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