Excerpts from CNBC-TV18's exclusive interview with the Satyam’s management Page 3

Q: What about pricing - 2% up, the market is quite worried that in the next 3-4 quarters the prices may tighten, but they are still moving up, what are your expectations on the pricing front?

Raju: We have done fabulously well this year and this quarter. In fact, the prices have increased more than ever in Satyam’s history. So in that sense the pricing environment for us has been quite good and against what we have guided for we have done extremely well.

So in that sense, this quarter is a very special quarter. One also needs to take into account the size of business and the base has significantly increased; now we are crossing USD 2 billion revenues this year and if we compare with the times when we came out of the dot com bubble burst, we had a revenues of USD 150 million.

This year if we take the additions of volumes and profit arising out of that profit would be higher than the revenues that we had a few years ago. It indicates that inspite of the volumes going up, we have been able to sustain growth. We are also witnessing an increasing engagement of the customers with us for strategic deals, which means we are providing end-to-end solutions and they seem to have the confidence that we would be able to deliver well against whatever their requirements, things that they would have been interested in the large established systems integrators just sometime ago.

Q: Are you seeing any particular vertical slowing down because we heard BFSI, telecom and retail are experiencing some problems in the US? Any vertical from which you have any voices of distress from your clients or customers?

Raju: Not significant, except for the fact that growth along the nascent vertical is obviously greater because they start with a smaller base as compared to others and that may have given the impression that the proportion of revenues to established verticals maybe coming down, but I think it is a positive sign, because the volumes in those verticals continue to grow even in areas under a cloud, such as financial services. We have seen a fair amount of volume growth and we expect that to continue.

Q: Any changes in your foreign exchange management policy in the light of what has happened in the last one quarter?

Vadlamani: We have tactically increased our hedging positions. Today we have almost a USD 1 billion of hedging. As per the policy, we wanted to hedge only 50% of our expected dollars inflows, but now it accounts roughly around for 75%. But it’s a tactical move and definitely it is not a long-term view. However, keeping in view what is happening at the market place, we thought that we should hedge and that really is helping us.

If you look at this quarter, we made a marginal loss of around Rs 3 crore. Also, the rupee has been rather stable this quarter and last quarter we had a gain of Rs 42 crore. So overall I think, our hedging policy, our hedging strategy policy is playing out well.

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