Tuesday, November 10, 2009

Filled Under: ,

Mahindra Satyam sees worst over

Indian IT services firm Mahindra Satyam has added 35 new clients since April 13 and lost just a handful, said the firm's chief executive, adding that the worst was behind it and that spending by key customer groups was improving.

Mahindra Satyam, earlier known as Satyam Computer Services, was acquired by India's Tech Mahindra in April after the firm was hit by India's biggest corporate fraud, which came to light in January.

"I do believe that we are now stable from a customer, or a delivery perspective," C P Gurnani said.

"I am very, very clear that the bottom is behind us and we are back on a path to recovery," he added in the interview on the sidelines of a World Economic Forum event in New Delhi.

He said the company, which lost 25 to 30 percent of its customers between January and Tech Mahindra's agreement to take over the firm on April 13, had since then added 35 new customers and, to his knowledge, lost just three.

"These 35 logo accounts have come from emerging markets, the Middle East and Africa, and we have also added some clients in the US and Europe," Gurnani said.

The firm had about 380 customers when Tech Mahindra won an auction to take it over, said Gurnani, who was president of international operations at Tech Mahindra before taking over at Mahindra Satyam.

Tech Mahindra, a unit of tractor and utility vehicle maker Mahindra & Mahindra, owns about 43 percent of Mahindra Satyam.

By comparison, rival Wipro said it added 37 clients in the July-September quarter.

Satyam's founder and then-chairman Ramalinga Raju shocked investors in January by saying profits had been overstated for years, which at the time had put in doubt the survival of a Hyderabad-based company once ranked as India's No. 4 software services exporter.

"I am very happy with the progress that we made, considering that this company had a situation where the focus on new sales had practically become zero," said Gurnani.

He said growth for the IT outsourcing industry would come from clients including the financial services sector.

"They went through a fair amount of slowdown in spending. And now with some of the, at least the American firms you've seen, the kind of numbers they are returning with, I do believe that they will accelerate their spending," he said.

Bigger rivals Infosys and Tata Consultancy Services have said demand from financial services clients was stabilising, but manufacturing and telecoms remained weak spots.

"Similarly healthcare, education, government, public sector -- I mean these are the areas where the spending velocity will be higher than last year," Gurnani said.

"The momentum is good, the uptake has improved, and I hope that it translates to better numbers not only for us but for the Indian IT industry," he said.

Gurnani also said the restatement of company results for recent years would be made on or before June 30, 2010.

0 comments:

Post a Comment

Blog Archive