Satyam scores 141% net profit jump

By Staff and wire reports

MUMBAI, India -- Satyam Computer Services reported its April-June net profit surged 141 percent from a year ago, but warned the U.S. tech fallout will curb growth.

Net profit at the Indian software house jumped to $25.66 million or 3.89 rupees per share on total income of $89.3 million, beating analyst forecasts.

Despite the impressive spurt, Satyam chairman B. Ramalinga Raju told analysts in a conference call that growth had slowed from the previous quarter.

Challenging market

"Our growth has come off significantly as compared to last quarter," said Raju.

"We believe that the market will continue to be challenging and therefore we need to contend with relatively lesser growth than we experienced last year."

Satyam's net profit rose 9.1 percent from the previous quarter, which in turn had increased 26 percent from the preceding three-month period.

In contrast to the preceding quarter when the software firm added 32 companies to its client list, Satyam added only 27 clients during the April-June quarter.

Its client base includes companies from the energy, finance, insurance, healthcare and media services sectors, with North America continuing to account for a significant portion of its total revenue.

About 77 percent of Satyam's total revenue came from North America, with 7.83 percent from Europe, and 2.82 from Japan.

Indian software and software services exports are expected to grow by 40 to 45 percent this year -- a forecast set by India's National Association of Software and Service Companies (NASSCOM).

In contrast, the IT services industry in the U.S. -- with an estimated 12 percent growth rate -- seems virtually stagnant.

Satyam forecasts 40 percent growth this year in income from software services -- a forecast that exceeds the 30 percent revenue increase expected by rival Infosys Technology, which on Tuesday reported 50 percent growth in April-June net profit.

Satyam's shares were trading up 12.15 rupees at 184.25 rupees Thursday on the BSE in Mumbai.

Reuters contributed to this report.