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Impressive results from Satyam - Views on News from Equitymaster
Satyam reported an 82% growth in net profits on the back of a 77% rise in the turnover for the third quarter ended December 1999 (as compared to the corresponding period last year). The profits before interest, depreciation and tax increased 65% primarily due to the fact that the software development expenses increased 79% and the marketing expenses increased two and a half times.
(Rs m)
3QFY2000
3QFY1999
Change
Net Sales
1,776.3
1,004.2
76.9%
Other Income
2.5
0.8
207.5%
Expenditure
1,120.7
608.2
84.3%
Interest
98.9
71.2
38.9%
Depreciation
182.3
116.5
56.5%
Profit before Tax
376.9
209.1
80.2%
Tax
15.0
11.0
36.4%
Profit after Tax
361.8
198.1
82.6%
Net profit margin
20.4%
19.7%
Interestingly, the sales in the domestic market (though still a small percentage of the total turnover) increased to Rs 35.2 million in the current quarter from just Rs.1.5 million last year. The company derived less than 1% of its revenues from Y2K. Similarly the contribution from the legacy business was 13%. On the other hand e–commerce project revenue climbed to 21%.
Business from new customers contributed 36% during the quarter while the top 10 customer revenue declined from 65% in the previous quarter (ended September ’99) to 56% in the current quarter. The major new customers added in the current quarter include Cable & Wireless, Commercial Bank of Oman, Emirates Airline, hsupply.com, Dowell Schlumbergber and Shaw Industries.
The number of technical employees for the company stands at 4,111 (as against 3,778 for the quarter ended September 1999). This is apart from the 542 technical employees in Satyam Infoway (where Satyam holds 61% of the equity).
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