UPDATE 1-Mahindra Satyam Q3 net more than doubles vs Q2

Mon Feb 14, 2011 12:37am EST

* Q3 net profit at 589 million rupees vs 689 mln forecast

* Q3 net profit more than doubles from qtr ago

* Revenue up 3 pct from qtr ago

* Shares rise as much as 14 percent after the results (Adds details)

MUMBAI, Feb 14 (Reuters) - Indian software services exporter Mahindra Satyam Ltd SATY.BO said its fiscal third quarter net profit more than doubled from a quarter ago, sending its shares up as much as 14 percent.

The company, which was rattled by India's biggest corporate fraud in 2009, said it was exempted by regulators from publishing quarterly results for the period between Dec. 31, 2008 and March 31, 2010.

Shares in Mahindra Satyam rose as much as 14.2 percent to 66.10 rupees after the results. The company said its net profit in the quarter ended December rose to 589 million rupees ($13 million), versus 233 million rupees in the quarter ended September. StarMine SmartEstimates, which places more weight on recent forecasts by top-rated analysts, had forecast a net profit of 689.2 million rupees for Mahindra Satyam.

"The profit is below estimates, but the revenue growth is decent and the company has also shown some improvement at the operating level," said Rohit Anand, a sector analyst with PINC Research. "The company seems to be slowly gaining traction." The company posted revenue of 12.79 billion rupees, up 3 percent from a quarter earlier.

Satyam Computer, which was bought by Tech Mahindra and renamed Mahindra Satyam, stunned investors in 2009 when its former chairman and founder Ramalinga Raju said profits had been overstated and assets falsified in a fraud allegedly worth more than $1.5 billion.

Mahindra Satyam, which once ranked as India's No. 4 outsourcing firm, in September for the first time since the revelation of the fraud unveiled its financials to report a net loss of 1.25 billion rupees for the fiscal year ended March 2010. For fiscal 2009, it reported a loss of 81.77 billion rupees.

The Hyderabad-based company lost quite a few clients after the fraud was revealed, but expects to gain clients now that the restating is done, Chairman Vineet Nayyar said in November. ($1=45.6 rupees) (Reporting by Sumeet Chatterjee; Editing by Jui Chakravorty)

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