Satyam Computer Services Limited recorded revenues of Rs 771.50 crore (Rs 7.71 billion) and its net profit soared to Rs 173.48 crore (Rs 1.73 billion) during the first quarter of the current financial year 2004-05.
Announcing the quarterly results in Hyderabad on Thursday evening, Satyam Computers chairman B Ramalinga Raju said that the company witnessed a 7.05 per cent sequential revenue growth in Q1 on the back of traction with existing customers and a favourable exchange rate scenario.
Revenue for Q1 at Rs 771.50 crore was better than the guidance of Rs.732 crore (Rs 7.32 billion). Earning per share at Rs 5.48 grew 22.87 per cent sequentially and was significantly higher than the guidance of Rs 4.78.
"On account of the business upside and rupee depreciation witnessed in Q1, revenue guidance for fiscal 2005 is now expected to be in the range of Rs 3268 crore (Rs 32.68 billion) to Rs 3312 crore (Rs 33.12 billion), an annual growth of 28.6 per cent to 30.3 per cent. EPS for fiscal 2005 is also revised upwards to Rs 21.71 to Rs 22.06," Raju explained.
In the last four quarters, the number of customers with a run rate of $1 million per annum has increased by 50 per cent to 96. Customers with a run rate of $5 million and $10 million have also witnessed similar growth rate.
"This has been made possible by our ability to identify greater opportunities and engage with customers at the level of key decision makers as well as a larger focus on the relationship-based business models," he added.
This broad basing of growth across an increased customer base has significantly de-risked the company's revenue model, resulting in its top 10 customers contributing 42.62 per cent of revenue in Q1 as against 51.29 per cent in the corresponding quarter of fiscal 2004.
During Q1, the company added 25 new customers including three Fortune Global 500 corporations. "Our efforts to increase the contribution of offshore revenues within the revenue-mix are showing signs of success. In Q1, our offshore volume growth of 9.6 per cent has been the highest in the last 12 quarters. The pricing environment continues to be stable," the Satyam chairman pointed out.
"The increase in the number of our service offerings, arising out of enhanced domain and technology understanding, is making us more relevant and applicable to a broader cross-section of our customer organizations, thereby enhancing our growth potential," he observed.
Pointing out that the first quarter saw the opening of the company's 19th Development Centre at Hartford, USA, he unveiled plans for establishing a near-shore development centre in Budapest, Hungary as well as expanding the existing centres in India.
Referring to the future outlook for the company, he said, "While the global delivery of services has been clearly recognised as a mature and acceptable model today by large organisations, we believe that it is the demonstration of the ability to create business value much more innovatively, that will determine our future growth rates."
He said that the company would continue to invest in building such solution capabilities, both organically and through acquisitions. An added thrust on relationship management, and a focused brand building effort across all its touch-points would take the service experience to a higher level, globally.
"Our aim is to enhance our competitiveness vis-à-vis global IT majors. As a significant step towards achieving this goal, we lay a lot of emphasis on taking customers' businesses up the value chain, with a better understanding of their business fundamentals," Raju said.
Satyam's business process outsourcing subsidiary Nipuna recorded revenues of Rs 7.01 crore (Rs 70.1 million) in Q1. During the quarter, Nipuna more than doubled its manpower to 1060. Out of the 14 active customers of Nipuna, 12 are existing customers of Satyam, thus indicating the potential for cross-selling of services across the company's entire customer base.
