Mahindra Satyam, formerly Satyam Computer Services Ltd., reported a robust growth in its consolidated net profit for the third quarter ended December 31, 2011.

The company's revenues rose by 34 per cent to end at Rs 1,718 crore, compared with Rs 1,279.30 crore in the corresponding quarter of the preceding year.

Its net profit soared to Rs 308 crore from the Rs.58.91 crore in the year-ago quarter.

Fall in the value of the rupee had saved the day for Mahindra Satyam, with the rupee depreciating by 10 per cent during the quarter. Without it, volumes would have stayed flat with a decline of 0.3 per cent.

Revenue for the quarter from 'Information Technology Services' segment totaled Rs.1,684.70 crore, while that from 'BPO' was Rs.40.89 crore.

Dollar revenues saw a dip at $325 million as against $330 million.

After completing a three-year journey from near collapse in 2009, the company improved its operating metrics despite the Euro zone crisis and uncertainty in the US market.

EBIDTA margin, a key indicator of a company's performance, was lying very low at 6.1 per cent when the company began to revive its fortunes.

Unlike last year, the company gave a wage hike in the third quarter, increasing employee costs to Rs 1,046 crore from Rs 910 crore. It gave an average hike of 12 per cent for offshore and two per cent for onsite staff.

As of December 31, total number of employees stood at 32,280, with a net addition of 188 over previous quarter. Attrition rate was put at 16 per cent (25 per cent) in the quarter.

Mr C.P. Gurnani, Chief Executive Officer, was cautious. There were some challenges as delayed decisions stalled top projects.
“Despite headwinds, Europe business grew by 4.2 per cent and BFSI by 7 per cent quarter-on-quarter. We are investing on new verticals such as M2M as we foresee huge opportunities in machine-to-machine communication,” Mr Gurnani said.

The business mix geographically has not changed much, with the Americas continuing to contribute about 50 per cent, followed by Europe.

Mahindra Satyam and Tech Mahindra have appointed accountants and bankers to assess and ascertain valuations of the respective companies, paving the way for the merger of the two Mahindra group companies.

“They will submit their assessments to their boards in due course. We expect that the merger process to be completed in eight months. Most probably, it should be done by October,” Mr Vineet Nayyar, Chairman of Mahindra Satyam and Vice-Chairman of Tech Mahindra, said.

He had not indicated any timeline for bankers to submit their reports and for other stages in the merger process.