Mahindra Satyam Q3 net drops 71% QoQ on Aberdeen settlement

Moneycontrol Bureau

Software services exporter Mahindra Satyam (Satyam Computer Services) on Thursday said third quarter consolidated net profit slumped 74 percent year-on-year (71 percent quarter-on-quarter) to Rs 80 crore, due to a one-time claim settlement reached with Aberdeen UK.

The Mahindra Group company's consolidated revenue in Oct-Dec was up 13 percent from a year ago (0.1 percent sequentially) to Rs 1,940 crore.

Satyam had paid USD 68 million to Aberdeen Global and other funds to fully settle claims related to an accounting scandal when it was run by Ramalinga Raju. The fraud had led to Raju's arrest and the Hyderabad-based company being sold to Tech Mahindra.

Excluding the exceptional hit of Rs 294 crore, the company's profit rose 21 percent YoY (35 percent QoQ) to Rs 374 crore. 

Mahindra Satyam's EBITDA (earnings before interest, taxes, depreciation and amortization) was up 51 percent YoY at 418 crore, while EBITDA margin rose to 21.6 percent from 16.2 percent. On a sequential basis, EBITDA was up just 0.3 percent, while margin was up 0.1 percent.

"With the settlement of the Aberdeen suit, the external litigation issues now stand concluded, freeing us to focus even more on the business-ready solutions for our customers," said Vineet Nayyar, chairman.

On a consolidated bas is Mahindra Satyam had 368 active clients as of Dec-end. It net added 169 employees, to take the total headcount to 36,956.

Its attrition rate last quarter was stable at 13 percent, the company said.

Satyam's key deal wins last quarter included a 3 year managed services contract with a leader in new product development and medical education in orthopedics, a application development and maintenance contract by a South African government department and Oracle and infrastructure support contract from a Middle East and African petroleum marketing company.

"We continue to strengthen our industry and alliance partnerships and explore multiple avenues for growth, including mergers and acquisitions," said CP Gurnani, CEO.

Mahindra Satyam shares closed at Rs 119.75, down 2.2 percent on NSE. The results were announced after markets closed.