The market was grossly disappointed with the numbers of Mahindra Satyam for Q4FY11. It posted a consolidated net loss of Rs.327 crore despite a 7.5% rise in revenue. But this loss was mainly on account of the one time exceptional expenditure spent on lawsuit settlement. Exceptional items was to the tune of Rs.571.5 crore in Q4FY11 related to restructuring, forensic investigation and litigation support, class action settlement consideration and provisioning for impairment losses in subsidiaries. And for FY11, exceptional expenditure was placed at Rs.641 crore. So till date the company has paid off US$ 125 million on class action cost, $10 million as US Securities and Exchange Commission (SEC) cost and $70 million for Upaid lawsuits.
The good part is that the company has completed cleaned up its books after the scam. It will now begin FY12 truly on a clean slate. Volumes have started picking up which rose 3.5% in FY11, mainly on the back of business from America and Asia-Pacific. And indicating the turnaround is the fact that it plans to hire around 17,000 people in current fiscal. Its current headcount is at 30,000. Its merger with parent company, Tech Mahindra is still quite far away as it is looking at a horizon somewhere by mid next fiscal. Baring this exceptional expenditure, overall, the company had done well and current fiscal could be its true turnaround year.
Source: Internet (Premiuminvestments.in)
