Satyam Computer Services: Getting the Big Ones

 



 

  
HIGHLIGHTS
  Enters league of extraordinary recruiters, increasing headcount by 45%
  Raises efficiencies on the package implementation side with SAP and Oracle expertise
  The 140% dividend payout for fiscal 2004 holds promise of stable returns for the investor
  Growing and dependable customer base, emergence as end-to-end services provider
  Though the Satyam brand of efficiency and spotless delivery is valued among midsized clientele, it is still not top-of-mind for the larger deal-makers
  Continues to be weak in servicing the domestic market, especially growing areas like telecom and manufacturing

Satyam Computers continued to expand its client base as well as spread geographically. It added more than 20 Fortune 500 companies during financial year 2003-04 to take its tally to over 100. In fiscal 03-04, top-line revenues grew over 10% faster than the previous year. Satyam has now a stronger presence in Europe, and is now setting up a centre in Hungary. Even as a big chunk of revenues continue to come from the US, Asia-Pacific markets remained elusive. One bright spot last year was the Shanghai subsidiary, which did Satyam proud. 

With Satyam now getting stronger in application outsourcing on SAP and Oracle platforms (26% revenues come from it), dipping on-site development that it faces in European and APAC markets could be countered. The company expects that with timely deliveries and well-articulated RoIs, sizeable orders could come from larger clients in the banking, finance and manufacturing verticals-in Europe and APAC, for its key software development and maintenance business.
Satyam caught up with the competition on the hiring front, with a 45% increase in employee intake. It added a net of 1,695 people in Q4, its highest ever quarterly intake. Of these, 1,145 were freshers. However employee productivity fell 17%. In fact, the Shanghai subsidiary scored better. Satyam further lowered its Sify stake from 37.15% to 32%. 


B Ramalinga Raju





Chairman


B Rama Raju
Managing director

Murty AS
Director & senior V-P

Ram Mynampati
President (Commercial & Healthcare)

Srinivas V
Director, senior V-P & CFO 

After the days of its services focus, like others Satyam too has been facing pressure on margins and billing rates. The company believes they are subsiding and expects an upward reversal this year. Already, net profit ascended 21% to Rs 556 crore from last year’s fall of 6%. A healthy cash position of Rs 380 crore gives Satyam the requisite muscle for growth through M&As on the way forward. The ramp-up on the customer side was the prime operational leverage. Hundred new customers were added, among them 23 Fortune 500 companies. As chairman B Ramalinga Raju told shareholders: “The current customer base, including 101 Fortune Global 500 customers, is indicative of the potential for our growth momentum.”

l Start-up year: 1987
l Products & services: IT services, software solutions
l Employees: 13,696 l Development Centers: 18
l Address: 1st floor, Mayfair Center, SP Road, Secunderabad 500003
l Tel: 040-7843222 l Fax: 040-23304826 l Website:
www.satyam.com

 

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