Mahindra Satyam shows 73% jump in Q4 profit; says turnaround complete

Hyderabad-based information technology provider Mahindra Satyam on Thursday reported a consolidated net profit of Rs534.21 crore for the quarter ended 31 March 2012, compared to a net loss of Rs326.98 crore in the corresponding quarter last year. On a sequential basis, this represents a 73.2 per cent growth over last year's fourth quarter.

Chairman Vineet Nayyar said while announcing the results that the company's turnaround had been completed within the three-year deadline he had set after Tech Mahindra's purchase of the scam-hit Satyam Computer Services Ltd in 2009.

At the same time, Mahindra Satyam reported a 3 per cent decline in revenue for the quarter, in tandem with other Indian software companies hit by the turmoil in Europe and a US market that is yet to pick up to earlier levels.

The company said that revenue sagged to 1,666 crore, hurt by cross-currency fluctuations. The profit increase was helped mainly by other income. The rupee is now at its lowest in four months at around Rs54 against the dollar.

The company's consolidated revenue for the fourth quarter rose 21 per cent to Rs1,665.84 crore, compared to Rs1,375.36 crore in the corresponding quarter of the previous quarter.

Mahindra Satyam's EBITDA (earnings before interest, tax, depreciation and amortisation) margins improved by 132 basis points at 17.5 per cent to Rs291.6 crore sequentially, from 16.2 per cent (Rs278.1 crore) in the quarter ended December 2011, on the back of considerable improvement in cost management and delivery among other things, according to Nayyar.