Mahindra Satyam bags 30 contracts

Mahindra Satyam or the erstwhile Satyam Computer Services has bagged around 30 IT contracts, after it was taken over by telecom solutions company Tech Mahindra in April.

Most of the deals won by the Hyderabad headquartered Mahindra Satyam are in the $1 million-$20 million range from both new and existing customers, a company official told Business Line.

Majority of the new deals have come from Asia Pacific and Europe. “There is increased traction especially in verticals such as healthcare, utilities and retail. We have recently signed a major multi-million deal with an oil exploration company which has been a client for quite some time now,” the official said.

These contracts are in the areas of outsourcing related to enterprise applications, business intelligence and engineering services.

Mr Sridhar Maturi, spokesperson for Mahindra Satyam, said: “There is renewed customer confidence which is reflected by most of the embargoes being lifted and new deal wins.”

However, he refused to comment on the nature of new deal wins. The level of profitability of these new deals remains in the realm of speculation as customers aggressively want lower billing rates given the current economic environment.

Mr C. P. Gurnani, Chief Executive Officer of Mahindra Satyam, referred to this in a recent conference call with analysts.

“I think every customer, every business is looking at finding ways and means to address the downturn in the economy and we at Mahindra Satyam are finding the same challenges that the market is facing. We are constantly working with our clients to figure out methods of becoming more cost-effective or to become better at onsite offshore mixes,” he said.

After former Chairman, Mr B. Ramalinga Raju, confessed to a Rs 7,600-crore fraud which involved falsification of Satyam’s accounts, most of its customers had put a freeze on new deals with the IT firm. What followed next was large-scale client exodus which saw companies such as Coca Cola, State Farm Insurance and some others walk out of their contracts with Satyam.

However, since the new management from Tech Mahindra took over, things seem to have settled down.

Not a single customer left the company after April 13 – the day when Tech Mahindra was named as the suitor of Satyam, the official added.

Mr Gurnani did admit, in the conference call, that the pricing on some of Satyam’s existing IT contracts were derogatory to margins, leading credence to the theory that the previous Satyam management was focusing only on growing the company’s revenues.

“When you go through the contracts, you also realise that there is a certain amount of business from one or two clients where the pricing is more predatory and one is definitely trying to find ways to either renegotiate the contract or to exit the contracts or make them profitable by finding ways or means of lowering the delivery cost,” he said.