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Satyam Results 2010 | Styam Results | Satyam | Mahindra Satyam Results | Mahindra Satyam News | Mahindra Satyam Indian outsourcing firm Satyam Computers was set Wednesday to announce its first earnings results in nearly two years after a massive false accounting scandal that threatened its future.
The company called the publication of the earnings “a new beginning” for the troubled company.
Now rebranded Mahindra Satyam after a takeover by the mid-sized software outsourcer Tech Mahindra, the company will report figures for the financial years 2009 and 2010.
The company is also in the process of restating its accounts for the last half dozen years to give a precise picture of the firm’s past performance.
The Hyderabad-based firm’s stock has become more of a speculative share since former chairman B. Ramalinga Raju admitted overstating profits for years and inflating the company’s balance sheet by more than one billion dollars.
But the company’s shares have jumped 14.3 percent over the past month ahead of the earnings release, closing at 98.8 rupees on Tuesday, buoyed by optimism over the earnings.
Raju’s revelations marked India’s biggest corporate fraud and have been likened to the US energy giant Enron, which collapsed in 2001, also over false accounting.
In April, Tech Mahindra, a unit of the tractors-to-holidays conglomerate Mahindra and Mahindra, paid nearly 600 million dollars for a majority share of struggling Satyam.
Investors have been waiting for signs of recovery, particularly after the firm said last week it would delist from the New York stock exchange over fears it may not meet US reporting deadlines for its restated accounts.
Citigroup expects Satyam to post net profit of 6.18 billion rupees (137 million dollars), on revenue of 52.14 billion rupees for the 2010 fiscal year ended March 31.
Satyam has struggled to retain staff in the face of stiff competition from rivals such as Tata Consultancy Services and Infosys Technologies, which have both ramped up recruitment as demand for outsourcing increases.
Sanjeev Hota, senior analyst with Sharekhan stock brokers, said Satyam may face pricing challenges in coming months and could need to lower rates to retain clients.
Satyam’s ability to pitch for deals with potential clients could have been affected in the absence of verified financial accounts, analysts say.
“With predatory competition, client and staff attrition, and a damaged reputation, the combined entity faces an uphill struggle over the next few quarters, if not years,” CLSA analysts said in a recent report.
Raju, who faces a slew of charges including conspiracy, cheating and forgery over the scam, was granted bail on health grounds by a court in the southern city of Hyderabad earlier this month.
Satyam, ranked as India’s fourth-largest outsourcer by revenue when the scandal broke, acts as a back office for some of the world’s biggest companies including Nestle, General Electric and General Motors.
The firm operates in nearly 70 countries, with 690 clients including 185 Fortune 500 blue-chip companies and provided key logistics for this year’s World Cup football tournament in South Africa.
Its logo was on pitch-side advertising hoardings at every match, which managers saw as a way to restore the company’s brand image.

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