Indian software services exporter Mahindra Satyam posted on Monday a net loss for its fiscal fourth quarter, hurt by a one-time expense due to settlement of a U.S. shareholder lawsuit, sending its shares down as much as 6 percent.

Satyam stunned investors in 2009 when its former chairman and founder Ramalinga Raju revealed that the company fraudulently inflated revenue, income and cash balances by more than $1 billion over five years.

The revelation caused the company's shares to plummet. Satyam agreed in February to pay $125 million to settle the U.S. shareholder litigation over that decline.

If you exclude the one-time expense, the growth at the operational level is decent. This can be improved further as the company is still concentrating on stabilizing revenue, said Rohit Anand, analyst with PINC Research.

Hyderabad-based Satyam Computer, which was bought by Tech Mahindra and renamed Mahindra Satyam, doubled its operating margin to 13 percent in the quarter from the December quarter, its Chairman Vineet Nayyar told a media briefing.

This is still lower than the over-20 percent margins enjoyed by bigger rivals Tata Consultancy Services , Infosys and Wipro .

It will take a year and a half, 17-18 months, for us to reach the industry level, Nayyar said.

Satyam, which once ranked as India's fourth-biggest outsourcing firm, is also still fighting another lawsuit filed by investors in its U.S. shares claiming they had suffered losses of over $68 million due to the sharp decline in share price following the revelation of the fraud.

There is uncertainty about the liability of the Aberdeen suit. This is a concern, PINC's Anand said.

Satyam's shares were trading 4 percent lower at 73.80 rupees in a weak Mumbai market. They are up about 12 percent this year compared with a near 12 percent fall in the sector index <.BSEIT>. They touched a low of 72.30 rupees earlier in the session.

PROFITABLE GROWTH FOCUS

Satyam, which had lost quite a few clients after the fraud was revealed, is seeing a steady improvement in demand and plans to add 10,000-12,000 staff over the next four to five quarters, Chief Executive C.P. Gurnani said.

It added 12 new clients in the quarter, he added.

We are acutely aware of the challenges that lie ahead in this transformation journey. Accelerating profitable growth and building capability to deal with the scale are our key focus areas, Gurnani said.

Net loss for the quarter that ended in March was 3.27 billion rupees ($72 million) compared with a net profit of 589 million rupees reported in the December quarter for Satyam.

The company's revenue rose 7.5 percent to 13.75 billion rupees quarter-on-quarter.

Analysts had forecast a net profit of 997.5 million rupees, according to Thomson Reuters I/B/E/S.

The company, which restated its results for fiscal years ended March 2009 and 2010, gave only full-year figures for 2010 without a quarterly break up.

(Writing by Bharghavi Nagaraju; Editing by Aradhana Aravindan and Muralikumar Anantharaman)

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