• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Suresh Krishnamurthy

CHENNAI, Oct. 8

THE induction of new equity partners into Satyam Infoway (Sify) is poised to give a facelift to the reported numbers of Satyam Computer (Satyam).

The financials of Sify will no longer require to be consolidated with that of Satyam since the former is not a subsidiary anymore. The consolidated profits and earnings per share of Satyam will, therefore, rise sharply in the annual report for the forthcoming year.

For the year ended March 2002, Satyam reported a consolidated profit of Rs 78 crore even though its IT services business' (run through the listed company Satyam Computer) recorded profits of Rs 490 crore. This is because Sify reported a loss before non-recurring and extra-ordinary items of around Rs 727 crore. Since Satyam held 52 per cent of Sify, 52 per cent of Rs 727 crore or Rs 378 crore will have been considered for consolidation.

The consolidated numbers may have looked even more disastrous for year ended March 2003 since Sify's losses have shown an increasing trend. Still, Satyam's consolidated profits for year ended March 2003 may be less than that of Satyam's IT services profits. This is because of the losses incurred by the IT products business run through subsidiaries.

For the year ended March 2002, IT products businesses reported a total loss of Rs 153.76 crore.

The markets may, however, ignore these developments. The stock price of Satyam was never priced based on the consolidated per share earnings of Rs 2.53 per share. It was based more on the per share earnings of Satyam of Rs 15.78.

Send this article to Friends by E-Mail
Comment on this article to BLFeedback@thehindu.co.in

Stories in this Section
Cross-connections at VSNL

Copyright © 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line