Tuesday, August 22, 2006


Though Raju might be quite content with the current state of affairs, the most urgent fact is that Satyam suffers an issue, that can cripple it in no time at all. Manpower costs of Satyam for the year ending March 2006 were a mammoth 58.27% of net sales, which is higher than the Big Three. A report by Enkay Research cautions that with salary hikes effective in July 2006, “operating margins are expected to decline further during the second quarter.” Srinivas Vadlamani, CFO, Satyam, counter-claims, “Given that manpower related costs form a major expense portion, our endeavour has been to constantly improve productivity & search for innovative ways to trim overheads to sustain margins.”

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