Satyam Computer Services
Satyam Computer (Satyam) is expected to deliver a revenue growth of 9 per cent q-o-q in rupee terms and 6 per cent q-o-q in dollar terms, which is not exciting given that a part of it would be backend-growth (subdued performance in Q1 FY09). EBITDA margins should contract 150 bps to 22.6 per cent on account of salary hikes.
While the scenario is challenging in the US, Satyam is witnessing increased traction in its other markets like Asia Pacific and West Asia. The package implementation business is also witnessing good deal flow as compared to services like consulting. Cash on books is also about Rs 67 per share (close to 21 per cent of its market cap).
With the market believing that Satyam has a significant exposure to Merrill Lynch has resulted in the stock plummeting by over 20 per cent in the last two weeks, despite the fact that the company has one of lowest exposure in the BFSI space (23 per cent). While issues on demand side remain, analysts believe that the stock price reaction has been more than warranted.
Image: Employees of Satyam group stand outside the city centre mall in Hyderabad. | Photograph: Noah Seelam/AFP/Getty Images
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