UPDATE 1-India's Tech Mahindra posts profit, upbeat on Satyam

* Tech Mahindra Q4 net at 2.3 bln rupees versus 2.2 bln loss

* Sees challenging environment, prices fell 2.5 percent in Q4

* Feeling positive about Satyam opportunity: CFO

* Shares ended down 3.4 percent before earnings announced (Adds details, CFO comments)

By Sumeet Chatterjee

BANGALORE, April 27 (Reuters) - Tech Mahindra Ltd (TEML.BO), which is now a top-tier Indian outsourcing firm with its deal to take over Satyam Computer Services (SATY.BO), on Monday posted a March quarter profit from a loss a year earlier.

The company, a unit of India's tractor and utility vehicle maker Mahindra & Mahindra (MAHM.BO), said a focus on efficiency and costs offset a weaker currency and global economic slowdown.

"The environment remains challenging," Sonjoy Anand, chief financial officer of Tech Mahindra told Reuters in a phone interview. "I would have to say that the environment on the pricing front is on the negative side."

Tech Mahindra received more than 60 percent of its revenue from Europe in January-March, and said a fall in the British pound against the Indian rupee over the year had dented earnings.

Earlier this month, Tech Mahindra won an auction for a controlling stake in Satyam, with a bid that could top $580 million depending on the outcome of an open offer.

The deal will help it diversify by reducing its reliance on the telecoms industry. The combined entity will have about 73,000 staff and Tech Mahindra will become India's fourth-largest outsourcing firm from a current ranking of sixth.

In early January, Satyam's founder and chairman shocked investors by saying profits had been overstated for years, putting in doubt the survival of a company once ranked as India's fourth-largest software services exporter. [ID:nBOM394323]

Brokerage India Infoline has said while Satyam would enhance Tech Mahindra's offerings and reduce client concentration, it would bring in "unquantifiable risks" due to legal liabilities and potential loss of clients.

"Obviously... we made some assumptions in terms of what the revenues will look like, we made some assumptions around what the potential liabilities can be," Anand said.

"Overall, our feeling is very positive about the Satyam team, the business opportunity."

MARGINS DECLINE

India's $60 billion outsourcing sector, which provides an array of services from software coding to managing computer networks and call centres, faces headwinds such as weak demand, cut-rate prices and rising competition from global rivals.

Tech Mahindra, a provider of information technology services to the telecoms industry, said net profit in the quarter to March was 2.30 billion rupees ($46 million) compared to a loss of 2.21 billion rupees a year earlier, which it said was due to accounting of a one-time expense of 4.4 billion rupees.

Brokerage Motilal Oswal Securities had forecast net profit for Tech Mahindra, 31 percent owned by Britain's BT Group (BT.L), at 2.04 billion rupees in the company's fiscal fourth quarter.

Revenue rose 3 percent to 10.51 billion rupees in the quarter.

Anand said EBITDA (earnings before interest, tax, depreciation and amortisation) margins fell 100 basis point from a quarter ago to 27 percent due to currency changes and a 2.5 percent fall in fees.

Ahead of the announcement, shares in Tech Mahindra, which counts BT Group and U.S. telecoms carrier AT&T (T.N) among its top clients, ended down 3.4 percent at 328.35 rupees in a Mumbai market .BSESN that rose 0.4 percent. ($1=50.2 rupees) (Editing by John Mair)