Satyam profit up 29 pct, sees no U.S. slowdown

By Sumeet Chatterjee

BANGALORE (Reuters) - India's fourth-biggest outsourcing firm, Satyam, reported a 29 percent rise in quarterly profit due to new clients, and raised its full-year outlook as it saw no signs of a slowdown in business in its key U.S. market.

Satyam Computer Services does not predict demand for outsourcing will fall despite growing fear of a recession in the United States, which accounted for 60 percent of sales in the December quarter, Chief Financial Officer V. Srinivas said.

"While we are very keenly watching how things are unfolding in the U.S., at this point in time we don't have any indication from our customers that they are going to either cut down budgets or withdraw some of the projects," Srinivas told Reuters.

"If the degree of recession is very high and the U.S. economy crash lands, then I am sure that every one of us will be hurt. But if the U.S. economy soft lands, then we will escape unhurt... at this point in time we are quite bullish about the future."

Shares in Satyam, India's No. 4 software services exporter, closed 0.3 percent lower after slumping as much as 11.4 percent, its lowest level in 30 months, amid a broad sell-off.

"The numbers are in line with expectations, but the overall guidance is muted," said Harshad Deshpande, a sector analyst with Religare Securities. "Concerns still remain about the U.S. recession...smaller players are likely to get hit more."

Satyam, which specialises in business software and offers back-office services, said revenue in the year to March would grow between 29 and 29.2 percent, up from the 26.3-26.7 percent forecast in October.

Earnings per share were forecast to grow 18.9 percent, up from the 16.5-17 percent growth Satyam had projected in October.