Mahindra Satyam soars on swinging into Rs 534 cr profit

Mahindra Satyam gained 2.5 percent in trade today after g swinging to a better-than-expected profit of Rs 534 crore in the Jan-March quarterfrom a loss of Rs 327 crorein the same period last year.Parent Tech Mahindra also benefited, up 1 percent after its unit’s results.

Sequentially, net profit for the quarter under review showed a 73.20 per cent growth, compared to Rs 308.43 crore in the quarter ended December 2011.The company’s consolidated revenues during the quarter grew at 21 per cent to Rs 1,666 crore as compared to Rs 1,375 crore for the same period last fiscal.

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After a smart opening, shares of the company further surged 7.78% totoucha high of Rs 72 on the BSE.

At the NSE, the stock jumped 4.63% to Rs 69.95. However, later the scrip pared some of its initial gains and was trading at Rs 68.65, up 2.77% at 1050 hrs on the BSE.

The company reported one-time gain of Rs 109 crore during the quarter. Analysts on average had expected net profit at Rs 220 crore and revenues at Rs 1,655 crore.

On the outlook for the current fiscal, company’s chairman Vineet Nayyar said though the global economic situation appears to be bleak at this point of time, the company would try to maintain the current level of growth.

“Economic prognosis at this point time is uncertain. There are large numbers of contradictions in Europe. This is going to have an impact on business, especially on spend. And I also said normally whenever affluent countries come under pressure and need to economise, they do turn to suppliers like us,” he said.

Going forward, analysts says Tech Mahindra’s earnings will depend to a big extent on largest client BT.

Mahindra Satyam is the former Satyam Computers, which was bought by Tech Mahindra in 2009 after it was hit by India’s biggest cororate fraud.

Reuters