Satyam Management said there has been 10% growth in Dollar terms and 3% in Rupee terms for Q1. Our EPS guidance is conservative. Guidance reduction is driven by Rupee appreciation.

They further said Rupee appreciation accounted for 230 bps in margins while Visa costs hit margins by 100 bps, RSU charges by 40 bps & Subsidiary by 30 bps. Overall cost impact on margins is 400 bps. Blended pricing improved by 110 bps QoQ and offshore utilisation and mix has also increased. Capped margin cut to 64 bps via higher pricing and utilization.

Market sentiment is positive which was reflected in both volumes and pricing dynamics. We are seeing good traction in large deals. We see growth across sectors especially retail, financial services, telecom, healthcare, the company said.

The company is factoring 125 bps decline in Operating Profit Margin in Q2 (YoY). About hedging practices, management said that the company covered 50% of expected US dollar inflows and the current hedge is of $ 750 million and the company has gained Rs 90 crore in Q1 on account of that. Forex gains of Rs 90 crore has been offset by translation loss of Rs 96 crore.

There has been 15% increase in enterprise solution business. There is an opportunity to ask for better pricing. We are confident of 2-3% improvement in billing rates in FY08, we have already seen 1% improvement in Q1.

There was differential pricing for consulting and enterprise. Prices will need to go up in line with market trends. We see higher ability to re negotiate for higher value added products. Our offshore utilization was at 52% up 135 bps, the company added.

Management believes that ERP, Engineering and Manufacturing are strong in deal pipeline. The company has signed a deal with Nestle and is looking for traction from industrial BPO. The impact of appreciating rupee was more severe on Nipuna, BPO of Satyam.

The company has factored salary hike in guidance and it is planning to recover some of the margin losses due to salary hikes in Q2 in second half. Attrition rate of Satyam is at about 13.6% on annualized basis.

Management said that the largest customer of the company contributes less than 6% to overall revenue of the company. Asia Pacific contributes to 18% of the revenue while Europe contributes just under 20%.