Satyam Computer profit rises 17%
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Satyam Computer Services Ltd, in the process of a merger with parent Tech Mahindra Ltd, met expectations with a 17 percent rise in second-quarter profit, as customers, aiming to cut IT costs, gave it more orders.
Profits for the September quarter rose to 2.78 billion rupees ($51.45 million) from 2.38 billion rupees in the year-earlier period, Satyam said in a statement on Tuesday. That compares with analysts' estimate of 2.73 billion rupees, according to Thomson Reuters I/B/E/S.
India's $100 billion-a-year software services industry earns about three quarters of its revenue from the United States and Europe. Australia is also an increasingly important market for the sector.
Billionaire Anand Mahindra purchased Satyam in a government-sponsored sale in 2009 after the founder of the Hyderabad-based company admitted to one of India's largest accounting frauds.
Mahindra is seeking to create a consolidated IT services powerhouse by merging Satyam and Tech Mahindra, which provides software services to clients such as BT Group Plc and SAAB AB.
Tech Mahindra owns close to 43 percent of Satyam, now called Mahindra Satyam. It is offering one share in itself for every 8.5 shares of Satyam to absorb the company.
Satyam shares have gained about 39 percent in value since March 21, when the company announced its plans to merge with Tech Mahindra. The stock closed up 0.65 percent on Tuesday ahead of the earnings report.
The sector index lagged the broader market this year, but has rallied about 9 percent since a July low as investors became more optimistic about some stability in the global economic environment.
Satyam's quarterly sales rose 22.8 percent to 19.38 billion rupees. Analysts were expecting sales of 19.24 billion rupees.
Earlier this month, top-ranked Tata Consultancy Services and fourth-ranked HCL Technologies beat expectations for second-quarter earnings. TCS reiterated it would beat the 11-14 percent estimate for exports growth made by the National Association of Software and Services Companies, an industry lobby.
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