Signing off the year in style with higher returns across all verticals, Satyam Computers saw some hiccups only on the margins front. Margin and billing pressures, which have snapped at the topline over the past few years, had subsided in 2004, but again came up last year. Operating margins dropped 2%. Revenues from Japan fell marginally, but this was more than compensated by an expanded client list, further resource ramp-ups and Satyam's Shanghai and European operations beginning to show healthy growth.

First quarter revenues of 10% clearly validate all the above. Some hard bargaining from newer clients saw slower growth into the second and third quarters, while billing pressures were in moderation compared to the same period in 2003-04. The fourth quarter stabilized things for Satyam with a 7% revenue growth and net profit rising about 52%. Full-year net profit jumped 39% as Satyam won 28 new customers in the fourth quarter alone. Satyam ended the year with over 70 Fortune 500 companies on its client list.

HIGHLIGHTS Raised the fresher component in its headcount by 49% Engineering and high-end design services were emerging stars Less dependence on USA. Ramped up China operations beyond Shanghai to Dalian and Beijing Stock continued to be a good buy, and quite bankable in a bearish market Experience of serving US, European and Asia Pacific markets Telecom and manufacturing growth in the domestic market continued to plod Margin pressures on exports continue   No visible M&A strategy for inorganic growth l Start-up Year: 1987 l Products & Services: IT services, software, ERP solutions and consultancy l Development Centers: 20 l Address: 1st floor, Mayfair Center, SP Road, Secunderabad 500003 l Tel: 040-55854343 l Fax: 040-27840058 l Website: www.satyam.com

The Shanghai operations fuelled Asia-Pacific region revenues to 52% growth in FY 2005. The collective European and Asia-Pacific operations helped trim the sizeable US presence, while maintaining the onsite-offshore mix at a balanced 57:43. This was despite US revenues dropping about 7% following the greater focus on the Asia-Pacific operations. The company's European plans will further gather steam in fiscal 2006.

Satyam's package implementation and outsourced app development operations showed 81% growth, but the surprise was on the R&D front. In fact, revenues from high-end engineering design and embedded software development alone grew 155% last fiscal. Currently at 7% of Satyam's revenues, this points at new directions in developing cross-platform competencies and multi-vertical expertise, besides opening up strong IP possibilities in the coming year.

While there was pruning in the 5-10 years experience category to 3,625 people from over 4,000 last year, Satyam's recruitment showed a high 49% fresher intake. Though over 600 new employees had over 10 years of work experience.

Maintaining margin profitability could be less of a challenge this year on the R&D front. The thrill of breaking the $1bn mark in fiscal 2006 should more than compensate for the hurdles ahead.