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Satyam Fall: HCL Tech Becomes Fourth Largest IT Company

09 January, 2009

The Satyam scandal has changed the pecking order of the top IT services firms in India. HCL Technologies has emerged as the fourth largest IT firm by market value as well as revenues and profits. This follows revelation of overstatement of Satyam’s numbers by its former chairman and founder B Ramalinga Raju.

According to Raju’s disclosures, Satyam reported non consolidated revenues for the second quarter ending September of Rs 2,700 crore and an operating margin of Rs 649 crore (24%  of revenue) when the actual revenue was Rs 2,112 crore and an actual operating margin of Rs 61 crore (3% of revenues).

Raju said the revenues of its subsidiaries were not fudged and if we include this figure then Satyam had consolidated revenues of Rs 2,232 crore. Stack this against HCL Technologies’ consolidated revenues of Rs 2,369.3 crore for Q2 (Q1 for HCL as it follows a July-June financial year).

So Satyam had lower revenues and profits for the second quarter compared to HCL Tech. Moreover, Satyam’s market cap crashed to a little above Rs 1,500 crore as of Friday’s closing price (Rs 20) as against Rs 7,300 crore of HCL Tech.

Meanwhile, Satyam’s scrip hit its 52 week low today with its stock seeing an intra day low of Rs 6.3 at NSE which gave it a market cap of Rs 425 crore. A sharp fall in fortunes compared to its 52 week high price of Rs 542 which had given it a market capitalisation of Rs 36,502 crore.


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3 Comments
samrat . 6 years ago

Seema like HCL tech more than deserves the slot. They got featured by business week recently as one of the 5 companies to watch out for in 2009 globally and again got endorsed on zdnet blog by Oliver Marks for their transparent management, innovation and employee first initiatives.

venkatakrishnan . 6 years ago

who knows if those numbers are ok….

Vivek . 6 years ago

Endorsement for good corporate governance and transparent management means nothing as Satyam’s Golden Peacock shows.. Moreover, HCL is sitting with high cash and cash equivalents on its books, an eyebrow raising practice these days!!

Satyam Fall: HCL Tech Becomes Fourth Largest IT Company

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