Satyam Rises to 8-Month High as It Prepares Earnings
Sept. 22 (Bloomberg) -- Satyam Computer Services Ltd. rose to an eight-month high in Mumbai after saying it will report annual earnings this month, its first since the software exporter was embroiled in India's biggest corporate fraud probe.
The shares rose as much as 13 percent to 107.35 rupees, the highest intraday level since Jan. 25. The stock changed hands at 105.50 rupees at 12:24 p.m.
Satyam, which delayed reporting its accounts after former Chairman Ramalinga Raju disclosed in January 2009 that he overstated the company's assets by $1 billion, will announce audited earnings for the fiscal years ended March 2009 and 2010, on Sept. 29, spokesman Sridhar Maturi said. Tech Mahindra Ltd., which acquired Satyam, may absorb the company following the earnings announcement, said Naushil Shah, an analyst at Anand Rathi Financial Services Ltd.
"Once the numbers are out, and things are stabilized at Satyam, they will want to merge it with Tech Mahindra," said Shah, based in Mumbai. He has a "hold" rating on shares of Tech Mahindra.
Satyam may report a profit of 6.27 billion rupees for the year ended March 31, 2009, and 4 billion rupees for the following year, according to the average of two analyst estimates compiled by Bloomberg.
Government Takeover
Tech Mahindra's corporate communications department didn't immediately respond to an e-mail seeking comment.
Shares of Tech Mahindra rose 5.5 percent to 767.75 rupees in Mumbai trading. Tech Mahindra is partly owned by BT Group Plc and India's largest sport-utility vehicle maker Mahindra & Mahindra Ltd.
Raju's admission and resignation on Jan. 7, 2009, triggered a stock slump and a government takeover that led to the sale of the company to Tech Mahindra. Satyam in June had sought time until Sept. 30 from the government to file its financial results.
Raju won bail from a court in Hyderabad last month, his lawyer S. Bharat Kumar said by telephone on Aug. 18.
Tech Mahindra, the Pune, India-based software company, owns 42.6 percent of Satyam Computer. It gained control of Satyam in May last year after winning an auction held by a government- nominated board.
To contact the reporter on this story: Ketaki Gokhale in Mumbai at kgokhale@bloomberg.net
To contact the editor responsible for this story: Anand Krishnamoorthy in Singapore at anandk@bloomberg.net
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