Scripting a slow but steady recovery, Mahindra Satyam has crawled back to profit in the first two quarters of this financial year after two years of uncertainty. But all is not well yet, as the company battles issues like low staff utilisation and rising employee costs.
"Satyam has been in ICU for almost a year. The good news is that most of the damages that got inflicted on this company have now been repaired. But this does not mean that it is going strong; it is still in convalescence," said Vineet Nayyar, chairman of Mahindra Satyam, announcing the company's financial results for the first and second quarters of 2010-11.
The company has registered a net profit of Rs 23 crore on total revenue of Rs 1,242 crore in the second quarter.
The reasons for lower profits, according to chief financial officer Durgaprasad, were salary hikes, foreign exchange losses and currency fluctuations. The Hyderabad-based company had given a 15 per cent pay hike to its employees during the second quarter to retain its talent pool. The company has an attrition rate of around 25 per cent against the industry average of 13 per cent.
Despite these difficulties, the company remains bullish about its future. Chief executive officer CP Gurnani hinted that customers, who had put on hold their contracts with the IT firm because of its financial uncertainty, would be approached afresh.
The company also plans to gradually improve utilisation levels of its employees to increase its profitability.