The Hyderabad based company, owned by Ramalinga Raju is in news these days for the right reasons. Against the rough weather in US and other parts of the world, here is one company which is standing tall against all odds.
When most of its competitors are coping with the adverse market conditions, Satyam seems to be leading the pack with some astounding results to its credit. Let us look at some of the facts and figures and then analyse why they are so.
Same time last year, Satyam reported a 46% increase in the revenue and a 37% increase in profits. This year it reported a revenue increase of 49% with an increase in earnings of 27%, slightly lower than the market expectations. I am not getting into details of the segment wise income distribution for now, but it will be interesting to see how it has performed over the quarters under various regions or SBUs (Single Business Unit)
This might look strange but the fact is anything closer to last year’s result is a super achievement in today’s testing times. There are several reasons why Satyam is doing extremely well. Here are a few which is definitely worth taking note of.
Satyam is more diversified than its competitors, both geographically and client sector wise. It has its presence in package implementation, manufacturing, financial services, consulting besides technology, media etc.
Satyam boasts of a large clientele list – It has its presence in over 185 of the Fortune 500 companies. Whoops! That’s stunning by any means
For every 1% dip in the rupee value, Satyam gains 0.3% – Now calculate the net impact on its revenue, if the depreciation is closer to 10%. Wow!
Hedging the Rupee
Satyam is one of those few companies which hedges against the rupee volatility. Net impact – Satyam is protected against unfavourable movements of the currency
Value based acquisitions
Recently Satyam acquired a couple of companies – one from Belgium and the other from Chicago. Both are value based acquisitions
Despite all this, the future is not all that rosy. Oil is a big concern. In fact, it is a national problem and I don’t think Satyam will be able to pull it this time. If it did again, then this will be the company to watch for in the coming years.
What it has done so far is beautiful, what lies ahead is only to be seen. Speculators – Put your hands in the pocket. Time to cash in !!!
Satyam Shivam Sundaram!!!
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