Mahindra Satyam said on Monday its net profit jumped over two-fold to Rs. 58.9 crore (Rs. 589 million) in the October-December period compared to the previous quarter on increased utilisation levels of manpower.
Revenue grew marginally to Rs. 1,279.30 crore (Rs. 12.793 billion) in the third quarter from Rs. 1,242 crore (Rs. 12.42 billion) in the previous quarter of this financial year.
Mahindra Satyam Chairman Vineet Nayyar said increased manpower utilisation was one of the reasons for steep rise in net profits in the third quarter.
"There is an uptick there. Last quarter employee utilisation rate was 71 per cent and it is currently 73.2 per cent, which is what is contributing to our revenues substantially," he said.
On attrition, Nayyar said: "It is now running at about 25 per cent, which, incidentally, has now come down almost to the industry norms."
At the end of the third quarter, headcount was 28,832, an increase of 764 personnel from 28,068 employees on September 30, 2010.
The company is planning to add a net of 7,000 employees in the next fiscal.
Mahindra Satyam, formerly Satyam Computer Services, in September last year announced its first audited financial results for 2009-10 after its founder B Ramalinga Raju admitted to multi-crore accounting fraud in January 2009.
In November 2010, it announced its first quarterly result for the April-June, 2010, since the July-September quarter of 2008.
Mahindra Satyam CEO C P Gurnani said: "Clearly, the period started in June 20, 2009. So, by June 19, 2012, we hope that we would have brought our operating matrix in line with our peer group."
While the operating profit margins of TCS, Infosys and Tech Mahindra are in the range of 25 per cent to 33 per cent, the net profit margins are above 15 per cent, he said.
Operating profit margins indicates earnings of a company (before interest and taxes) on each rupee of sales. Replying to a question on the revenue mix among the verticals, company CFO Durga Shankar said that in terms of business verticals, manufacturing and banking, financial services and insurance (BSFI) were better this time.
"Between manufacturing and BSFI, there is 2 per cent increase. So, both of them constitute about 50 per cent of our total revenues," he said.
"The US still continues to be above 52 per cent contributor to the top line. But because Europe going up, there may be a small decimal point decrease there but substantial increase comes from Europe, which is contributing around 30 per cent at present," Shankar said.
Replying to question, Gurnani said the company has 217 active clients and added four new clients the last quarter.
"We are working with some of the accounts where we had relationships. We have recently been confirmed by two of our old clients this quarter - one in the insurance sector and one in the manufacturing sector - which have re-signed the services agreement with us.
"We are getting back to business with them. All the deals are in the three-to-five-year horizon. And, all these are in the range of $15 million to $30 million," Gurnani said when asked about the clients coming back to the company fold.
Mahindra Satyam had reported a loss of Rs. 1,250 crore (Rs. 12.50 billion) for the year ended March, 2010. Also, it had reported a net profit of Rs. 23 crore (Rs. 230 million) for the July-September quarter of 2010.
In January, 2009, former chairman and founder Ramalinga Raju had confessed to perpetrating a multi-crore scam wherein the company's profits were overstated and its assets falsified.
Tech Mahindra bought Satyam in April, 2009, and is operating it as an independent company.