Mahindra Satyam Q3 net drops 74 percent

Indian software services provider Mahindra Satyam has booked a 74 percent drop in third quarter net profit at INR 800 million (US$15 million), after suffering an exceptional charge related to a claim settlement by Aberdeen UK.

In results released Thursday, the company said there was a one-time charge of INR 2.94 billion (US$55 million) tp settle the claim made by the investment firm. The claim was a result of legal action by Aberdeen UK which sought US$150 million in damages for losses related to Satyam's 2009 accounting scandal.

"With the settlement of the Aberdeen suit, the external litigation issues now stand concluded, freeing us to focus even more on the business-ready solutions for our customers. Revenue growth from different verticals reflects our proven capability to enable enterprises to be future ready," said Vineet Nayyar, chairman of Mahindra Satyam, in the statement.

Consolidated revenues for the quarter ended December was up 12.9 percent on-year at INR 19.4 billion (US$364 million).

With a cash pile of INR 33.1 billion (US$622 million), Mahindra Satyam is looking at acquisitions in the European Union and Australia in the areas of engineering services, manufacturing and healthcare verticals, according to Hindu Business Line.

"The size of the deals is not an issue. We are looking at the right product,” C.P. Gurnani, COE of Mahindra Satyam, said during a results briefing.

Mahindra Satyam is currently waiting for regulatory approval for its merger with Tech Mahindra, but both sides have already begun to work together, Nayyer said, adding the merger was at the penultimate stage.

"It will happen in the near future. But de facto we are working together. We have made good progress in system consolidation, process alignment and the joint go-to-market strategies," he told the news daily.