Mahindra Satyam Q3 PAT seen down 7.5% at Rs 220 cr

Mahindra Satyam is expected to report a profit after tax of Rs 220 crore in the third quarter of FY12, falling 7.5% as compared to Rs 238 crore in previous quarter.

Revenues are seen going up by 10% to Rs 1,735 crore from Rs 1,578 crore QoQ.

EBITDA is likely to move up 10% to Rs 266 crore from Rs 242 crore during the same period.

There has been stabilization in operations over the past few quarters.

Expectations

- Dollar revenues impacted by around 100-150 bps cross currency impact ((alert Q2, dollar revenues growth at 3.1%, which was amongst the weakest in the industry (range for top 4 is 4-5%)

- Margins seen flat as currency benefit will be offset by wage hikes (company had deferred wage hikes to be effective from October 1st)

- Announced wage hike of 12.5% for offshore employees and 2.5% for onsite employees

- Margins have been on an improving for the past few quarters - Q2FY12 at 15.3%, Q1FY12 at 14.64%, Q4FY11 at 13%, Q3FY11 at 6.5%

- Seen stabilizing business both in terms of customer relationship and employee morale

- After 2007, it went to campuses for recruitment for the first time recently

- Company's niche positioning in ERP segment (now 40% of total revenues; 2/3rd of pipeline) big boost; it's been fastest growing segment for IT companies