Among verticals, manufacturing, technology, media and entertainment dragged while the emerging vertical (largely government) revenues increased by $7 million and was the primary driver for incremental revenue addition in the third quarter FY13 for Mahindra Satyam
The key disappointment in Mahindra Satyam’s third quarter results for FY13 was flat revenue growth in constant currency terms versus 2%-4% quarter-on-quarter growth at Tier-1 IT (information technology) peers. Nomura Equity Research sees downside risks to the revenue growth estimate of 9% (in dollar terms) in FY13F, as it would entail 5.5% quarter-on-quarter growth in Q4, which it believes might be difficult to achieve. Higher than anticipated net profit was aided by higher other income and lower depreciation, points out Nomura in its Quick Note. Tech Mahindra owns 43% of Mahindra Satyam and its merger with Satyam is pending with a stock swap ratio of one share of Tech Mahindra for every 8.5 shares of Satyam. The merger with Tech Mahindra is awaiting Andhra Pradesh High Court approval.
Among verticals, manufacturing (-2% quarter-on-quarter), technology, media and entertainment (-4% quarter-on-quarter) dragged, while the emerging vertical (largely government) revenues increased by $7 million quarter-on-quarter (29% quarter-on-quarter growth) and was the primary driver for incremental revenue addition in the third quarter of FY13, according to Nomura analysts.
A prominent observation made by the management of Mahindra Satyam to indicate its future business prospects is that the company has given 2,000 campus offers for FY14F. The company’s headcount increased by 169 people sequentially to 36,956 in the third quarter of FY13. Utilization increased to 77.1% (excl trainees) in the same period.
In the third quarter FY13, the company won deal flows in excess of $100 million in total contract value in verticals like manufacturing, healthcare and retail. Since closure for the deals won happened towards the end of the third quarter, Mahindra Satyam management expects revenue contribution to follow from fourth quarter onwards.
Revenues of the company stood at Rs19.4 billion versus Nomura’s estimate of Rs19.6 billion. Adjusted net profit (excluding Rs2.9 billion charge related to settlement with Aberdeen UK) at Rs3.7 billion was up 35% quarter-on-quarter. The company’s performance figures were higher as they were aided by a nearly Rs67 million quarter-on-quarter reduction in depreciation to Rs361 million and other income of Rs1.1 billion, according to Nomura.
Mahindra Satyam’s cash and cash equivalents was Rs33 billion in the third quarter of FY13.
Among services, IT Services was flat quarter-on-quarter, while BPO was up 18% quarter-on-quarter contributing all of the incremental revenue addition. BPO was driven by retail sector demand ahead of the holiday season, according to Nomura.
The adjusted EBITDA margin decline in the third quarter was on account of higher sub-contractor costs and a one-time expense of $4 million related to payment to an alliance partner for technical services. EBITDA margin ex of the Tech Mahindra employee bonus provision reversal adjustment (Rs335.5 million of reversal taken) was 21.6%.
According to Mahindra Satyam’s management, the company sees deal flows in infra, enterprise applications and engineering services for the future.
An activist has demanded a detailed inquiry regarding the UP minister's statement and denial about ‘whipping’ bureaucrats, in the media
Lucknow-based activist Dr Nutan Thankur has requested the Press Council of India (PCI) to enquire into the facts related with the allegedly statement of Azam Khan, a minister in the Uttar Pradesh government. On 30th January, the UP minister had allegedly said that “officers understand the language of whipping”, however next day he clarified that media reports were baseless and done to tarnish him image.
In a letter sent to Markandey Katju, former judge of the Supreme Court and chairperson of PCI, the activist demanded a detailed inquiry in order to bring the truth of whether initial media reports regarding Mr Khan's statement about ‘whipping’ is correct or not, which will also clarify the situation about his later denials.
According to media reports, Mr Khan, the urban development minister, while addressing party workers in the presence of Samajwadi Party chief Mulayam Singh Yadav had said that they (bureaucrats) understand only the language of the ‘cane’. The officials do not work for the welfare of public and instead eye on promotions and transfers, he was reported as saying. The minister lost his cool while listening to the problems of party workers and said, “You will have to keep a whip in hand to keep the officers working”.
Finance ministry says appointing a nodal officer at the ministry level would increase work load. However activists feel this would help RTI applicants as many a times, their applications are shuttled between various departments within the same ministry to avoid responsibility of responding under the RTI Act
The Union ministry of finance (MoF) has filed a petition before the Delhi High Court challenging the decision given by the Central Information Commission (CIC) for appointing a Central Public Information Officer (CPIO) at the ministry level.
The ministry said it has five departments, Department of Economic Affairs, Department of Revenue, Department of Expenditure, Department of Financial Services and Department of Disinvestment. Each department is headed by a separate secretary and the senior-most among the secretaries is also referred to as the finance secretary.
“...the current system is such that the departments have a nodal officer for Right to Information (RTI) matters. Each department has appointed various CPIOs as per work allocation in pursuance of Section 5(1) of the RTI Act, 2005. Any RTI receipt which is received in the office of the nodal office is subsequently marked to respective CPIO of the department for replying to the RTI application. This system is efficient as the query can be sent to the CPIO of the department to which it pertains so that it can be answered adequately and all the information can be effectively given,” the ministry said in the petition.
It said, “...in case a CPIO is appointed for the MoF as such, all the RTI applications of all the departments of the MoF would then come to one point and would be practically inexpedient to the concerned designated CPIO to handle all the RTI applications on all the subject matters allocated by the MoF. The difficulties that would arise inter alia are that the concerned CPIO would not be aware of all the subject matters which come under the jurisdiction of the MoF, the concerned CPIO would anyway have to consult the officers of the department to which the query pertains for information in order to address the query effectively and this would be a time-consuming process that would render the mechanism of getting prompt responses as envisaged under the act infructuous”.
According to Subhash Chandra Agrawal, on whose application the CIC had given the original decision, at a time when different departments of various ministries are themselves confused about subjects dealt by various departments, sais it is very difficult for members of the public about subjects dealt by different departments of a ministry necessitating appointing a nodal CPIO each in all ministries. “It is observed that many a time RTI petitions are shuttled between different departments of the same ministry in a bid to avoid responsibility for responding to RTI petitions,” he added.
Chief Information Commissioner Satyananda Mishra in an order issued on 7 September 2012, had said, "We have something called a ministry of finance with a finance secretary in position. Therefore, it is rather odd that the ministry does not itself have a CPIO. Even if it is admitted that the ministry operates through various departments under it, the ministry itself is in existence as a public authority and, therefore, it needs to have a CPIO. Therefore, we direct the CPIO of the Economic Affairs to place this order before the finance secretary who shall cause to be appointed within one month of receiving this order a CPIO for the ministry or nominate one of the existing CPIOs to act as the CPIO for the finance ministry also."
The finance ministry, however, said that the order passed by the CIC is contrary to the Government of India (Allocation of Business) Rules. “The finding of the CIC to the effect that there is a ministry of finance is founded on erroneous understanding that the ministry is a body independent of the five departments that come within it,” it said.
Requesting the high court to quash the order passed by the CIC, the MoF also pointed out that the order of CIC can have ramifications for other ministries as well since the overall structure of a ministry being comprised/divided into various departments in terms of work, is followed in most ministries under the Government of India.
However, Mr Agrawal feels the argument of increase in work-load by MoF is not true. “Rather appointing a nodal CPIO in all ministries will largely reduce work-load by avoiding misuse of section 6(3) of RTI Act for transferring petitions to each-other department in the same ministry. The MoF, in larger public interest should withdraw its petition,” he said.