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Satyam net profit dips 12% to Rs 118 crore

Hyderabad, Oct. 23: Satyam Computer announced a second-quarter net profit that was down 11.88 per cent over the same period last year, but the company said the numbers show it in better shape if they are measured against the results of the first quarter ended June.

At Rs 118.15 crore, the net profit was lower than the Rs 134.08 crore reported in July to September 2001. However, total income went up to Rs 505.05 crore from Rs 453.50 crore. What should hearten investors is that it expects a profit in the region of Rs 540 crore next quarter.

Half-year net profit (April-September) also declined to Rs 226.60 crore from Rs 255.54 crore in the same period of last financial year. Total income increased from Rs 874.52 crore to Rs 976.53, the Satyam chief told reporters.

“The profit drop is mainly due to the decline in other income, but the sequential growth is very encouraging,” chairman Ramalinga Raju told reporters after the board meeting that cleared a 40 per cent dividend. Other income fell from Rs 26.87 crore to Rs 5.91.

An anticipated rise in operating margin to 32 per cent has given managers hope it will come through on its bottom-line prediction for the three months to December.

A 20 per cent growth rate in dollar terms will be achieved for the full year ending March 31, 2003, Raju said. Earnings per share (EPS) will be Rs 16.06 to Rs 16.26, scaled down from the previously thought Rs 17.1-17.5.

Despite the fall in profits, analysts said Satyam still managed to beat market’s modest estimates, ranged from Rs 110-Rs 114 crore. “The growth in the topline shows that they have benefited from the trend of customers relying on outsourcing,” an industry watcher said.

Satyam lowered its forecast for full-year earnings per share to Rs 16.06-16.26 from 17.1-17.5 rupees. It however, retained its full-year software sales growth forecast of 18 to 20 percent in dollar terms.

On Dalal Street today, the scrip opened at Rs 212 and hit the day’s high of Rs 222.80, bolstered by the fact that the numbers were not as dour as many had feared them to be. Finally, the stock finished at Rs 215.75, a marginal increase of 60 paise over Tuesday’s close. Around 1.58 crore shares changed hands in 59,452 transactions.

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