Satyam 3QFY01: A curtain raiser - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Satyam 3QFY01: A curtain raiser

Jan 6, 2001

By far the most interesting news on Satyam for 3QFY01 was the US $ 200 m contract its JV, Satyam Manufacturing Technology Inc., got from TRW. Satyam Manufacturing Technology Inc., is a joint venture between Satyam and TRW (76:24). This would mean that the other income figure for Satyam could go up in the near future. The other major event was that it tied up with Ariba for implementing B2B solutions. This move was to consolidate its position in the enterprise applications integration market that has tremendous potential to grow.

Business mix
1QFY01 2QFY01
E-commerce 25.3% 27.1%
Telecommunications software 6.3% 9.9%
ADM* (Legacy and Client Server) 54.5% 48.1%
Engineering 9.1% 8.9%
ERP 4.8% 6.0%
*Application development and maintenance

Satyam has been increasingly changing its business mix in favour of e-business and telecommunications software since the last two quarters. Therefore, the portion of e-business and telecommunications software in 3QFY01 is expected to be higher.

Effort would be to de-risk the geographical revenue mix by decreasing exposure to the United States. Europe is an obvious choice. Satyam has a good presence in the Middle East, which it can hope to consolidate. Satyam’s revenues from Japan have been decreasing, which it claims, is on account of recession in the Japanese economy, but the real reason could be very few clients.

Growth
1QFY00 2QFY00 3QFY00 4QFY00 1QFY01 2QFY01 3QFY01E
Sales 24.8% 17.5% 13.3% 15.8% 2.0% 16.8% 15.0%
Operating Profit 2.7% 38.7% 7.8% 11.2% 13.1% 15.4% 15.3%
Net profit* -3.9% 64.5% 19.7% 14.1% 4.9% 29.0% 15.9%
*Other income not included

We are expecting Satyam to continue to grow in line with its past growth rates in 3QFY01. The anomaly in 1QFY01 and 2QFY01 net profit figures are due to high other income figures in 1QFY01 on account of sale of equity shares of Satyam Infoway to the Singapore Investment Corporation.

The numbers
(Rs m) 1QFY00 2QFY00 3QFY00 4QFY00 1QFY01 2QFY01 3QFY01E
Net Sales 1,335 1,568 1,776 2,057 2,334 2,725 3,134
Other Income 33 7 3 11 1,775 114 100
Total Income 1,368 1,575 1,779 2,068 4,109 2,839 3,234
Operating Profit 439 608 656 729 824 951 1,097
Interest 94 102 99 114 114 92 100
Depreciation 147 191 182 190 262 233 313
Net Profit 216 307 362 421 2,205 669 743

The growth in topline YoY would be around 76% and that in bottomline is expected to be 105%. The figures on a QoQ basis would be 15% for topline and 11% for bottomline. Over the year Satyam has been able to hold operating margins, which are comparable to the best in the Industry.

Score card
  1QFY00 2QFY00 3QFY00 4QFY00 1QFY01 2QFY01 3QFY01E
Operating margin 32.8% 38.8% 36.9% 35.4% 35.3% 34.9% 35.0%
Tax/PBT 6.5% 4.7% 4.0% 3.4% 0.8% 9.6% 5.1%
Net profit margin* 13.7% 19.1% 20.2% 19.9% 18.4% 20.4% 20.5%
Cash FDEPS (Rs) 1 2 2 2 9 3 4
FDEPS (Rs) 1 1 1 1 8 2 3
P/E (x) FY01E             48
*Other income not included

Equitymaster requests your view! Post a comment on "Satyam 3QFY01: A curtain raiser ". Click here!

  

More Views on News

If You had Invested Rs 1 Lakh in TCS in 2011, this is how Much You Would have Today (Views On News)

Nov 30, 2021

Did TCS perform better than the market and its peers?

India's Top 4 IT Companies are Struggling. Here's Why... (Views On News)

Oct 22, 2021

As attrition rates are unbelievably high, top Indian IT companies are going for big-ticket raises, and much more hiring this year.

Infosys had an Exceptional Quarter Buoyed by Huge Deal Wins. Revenue Guidance Boosts Stock (Views On News)

Oct 14, 2021

Infosys raised its forecast for annual revenue growth to 16.5-17.5% from the earlier 14-16%, predicted in July 2021.

Info Edge: The Anatomy of an Indian Internet Behemoth (Views On News)

Oct 2, 2021

Info Edge is very popular in the Indian startup ecosystem due to its active participation in funding events.

This Indian Company is Tapping into the Huge Autonomous Driving Opportunity (Views On News)

Sep 14, 2021

Despite many challenges, Indian companies and startups have not shied away from entering this space.

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

India's Top 5 Monopoly Stocks to Watch Out for (Views On News)

Nov 30, 2021

These 5 companies dominate their sectors with a huge piece of the pie.

The Biggest Winners and Losers in India's Transition to Electric Vehicles (Profit Hunter)

Nov 26, 2021

How India's EV transition could be a major headwind for the incumbents.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

MAHINDRA SATYAM SHARE PRICE


Jul 3, 2013 (Close)

TRACK MAHINDRA SATYAM

  • Track your investment in MAHINDRA SATYAM with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

MARKET STATS