Satyam Computers has posted revenues of Rs 1.38 bn (YoY jump of 65.7%) and profits of Rs 268 m (YoY jump of 72.5%) for the quarter ended June 30th. It also announced that the world's largest e-commerce solutions provider, Sterling Commerce, is investing $ 5 m for a 2.7% stake in Satyam Infoway, a subsidiary company.
Satyam Computers, a totally integrated information technology solutions provider, offers services relating to software and engineering, systems integration, e-commerce, software product development and management consultancy. The company currently has six development centres.
Satyam Computers has continued the blistering pace of growth that it has witnessed for the past two of years. However, what is of concern is that in FY99, 28% of the revenues were accounted for by Y2K related activities. This revenue stream is likely to gradually whither away with in a year, adversely affecting the company's growth prospects.
Satyam Infoway, an internet and e-commerce services provider, is likely to be floated via an American Depository Receipts issue later this year. Satyam Computers expects to derive growth from the contributions of this subsidiary, in which it holds an 81% stake.
Analysts have rated the stock as a 'BUY' mainly on account of the initiatives taken in reducing dependence on revenues from Y2K related activities, and the splendid growth achieved in both revenues and profits. The company's successful foray into internet related activities via its subsidiary has also lent support to the analysts view.
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