Mahindra Satyam back into black; to wind down ADS next year

Buoyed by improved business, IT company Mahindra Satyam today said it swung into the black in the April-June quarter, logging a Rs 225.2 crore profit, and unveiled plans to exit US stock market by 2012.     

Mahindra Satyam raked in consolidated profit of Rs 225.2 crore on revenues of Rs 1,433.9 crore in June quarter. The company, which is on a recovery path after being hit by one of the biggest corporate scandals, had a loss of Rs 327 crore in the previous January-March quarter.     

In an unexpected move, Mahindra Satyam (erstwhile Satyam Computer Services) also said it would wind down its American Depository Shares (ADS) programme in 2012, as it was not able to meet US accounting norms.     

Talking to reporters in Hyderabad, Mahindra Satyam Chairman Vineet Nayyar said that until last quarter the firm was confident of getting its accounts compliant with US accounting norms (US GAAP).     

"What we know is that the accounts that we presented, represented a true and fair situation of the company. And that was acceptable with the Indian regulators.     

"Last quarter, we were hoping, but this quarter we came to know that those will not be accepted by the US system and consequently, we have decided to withdraw (ADS)," he said.     

The company's American Depository Shares (ADS) were delisted from the New York Stock Exchange in October 2010 and are currently trading on the over-the-counter (OTC) market.     

Over-the-counter (OTC) trading involves direct transactions between two parties in financial instruments such as stocks, bonds, commodities or derivatives.     

On results, Nayyer said, "Our results, this quarter, demonstrate our progression to the growth phase of our three-year transformation journey. Our relentless focus on market growth and margin expansion has yielded satisfactory results for yet another quarter."