Satyam profits hit by rising rupee, fall 2% on quarter

DEVIL IS IN THE RUPEE: Satyam guidance was based on assumption of rupee rate of 40.50 per dollar.

    

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New Delhi: India Inc’s worst fears are turning real, as the rising rupee is taking its toll on the earnings of the biggest IT firms one by one. New York-listed Satyam Computer Services announced its first quarter results—a fall of 2 per cent in its net profit to Rs 389.14 crore for the quarter ended June 30, 2007 compared with Rs 397.50 crore in the March quarter.

Software firms have been winning large outsourcing deals but a stronger rupee, which has risen more than 9.5 percent against the dollar this year, poses a problem as the companies get about 60 percent of their revenue from the United States.

Shares in Satyam, based in the southern city of Hyderabad, fell 0.6 percent in the June quarter, in line with a decline in the sector index, but lagging a 12 percent gain in the main Mumbai index.

Satyam Guidance was based on the assumption of rupee rate of 40.50 per dollar. According to CNBC-TV18 estimates, the company was expected to post revenue of Rs 1,810.01 crore and net profit of Rs 391.4 crore.

Net sales stood at Rs 1759.08 crore for the June quarter against Rs 1709.03 crore in the Apr-Mar quarter, according to the announcement on NSE.

Other income was also down to Rs 61.85 crore (Rs 618.5 million) from Rs 74.4 crore (Rs 744 million). Net profit margin slipped to 20.67% from 22.15% QoQ.

The company has added 29 new customers including 2 US Fortune 500 corporations. It has added 2,716 employees.

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