"The financial performance of
Mahindra Satyam indicates that the firm is partly out of the fallout of the fraud practised by its erstwhile chairman,'' says Sudin Apte, CEO and Principal Analyst of Offshore Insights. Apte, who was earlier with Forrester Research and has tracked the company for a long time has good reasons to say so: The company announced its results for the quarter and for the full year ended March 31, 2011, and reported a consolidated revenue growth of 7.5 per cent over preceding quarter while the revenues for the full year were on a year-on-year basis down 6.1 per cent. It registered a net loss of Rs 327 crore during the quarter which the company has attributed to its one-time exceptional charges largely on account of class action settlement consideration.
While there are signs of stability now, analysts like Apte feel the company has yet to leverage the opportunities. "Our interactions with their clients show clients' inclination to work, and possibly expand with the firm. But, our analysis and the results announced today show that Mahindra Satyam has not been completely successful in converting this client mood into dollars in revenue. We believe Mahindra Satyam needs to get out of the past, get much more proactive, and upgrade its value proposition and differentiation."
Vineet Nayyar, chairman, Mahindra Satyam however seems upbeat: "This year has been a very satisfying one, given the impressive progress we made on various fronts such as minimising the legal overhang, fortifying governance mechanisms and restoring customer and employee confidence,'' he says.
The market however was far from impressed and the share price fell by over 4 per cent to close at Rs 73.55 on the Bombay Stock Exchange. Not surprising. A study by Offshore Insights shows: "Mahindra Satyam's operating margin, one of our top concern, as well as profitability is still lower at 9 per cent (before exceptional items). While compared to revenue growth and profitability of top firms like Cognizant, Infosys or Tata Consultancy Services, or even compared with overall industry average, Mahindra Satyam has reported a limited growth and low profitability.''
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