Mahindra Satyam CEO on the road to recovery

Summary:Interview: C P Gurnani discusses the rocky path to reviving Satyam's fortunes...

Interview: C P Gurnani discusses the rocky path to reviving Satyam's fortunes...

C P Gurnani Mahindra Satyam

CEO C P Gurnani: Everybody is focused on the future and we know we are doing the right thingsPhoto: Paul Hackett/Bloomberg News

How does a company recover from $1.7bn-worth of financial irregularities on its books? The answer, perhaps unsurprisingly, is slowly.

Two years after scandal rocked Satyam Computer Services, when the company's founder and former chairman B Ramalinga Raju admitted inflating profits, the company is still shaking off the after-effects.

The man charged with reviving Satyam - once India's fourth-largest software and IT services provider - is CP Gurnani, CEO of Satyam's new incarnation Mahindra Satyam. Satyam was renamed as Mahindra Satyam when the Indian IT outsourcer Tech Mahindra, took a majority stake in the company in 2009.

"It is a challenge. I got up at 3am this morning but I enjoy doing it," Gurnani said.

The types of challenges that face Gurnani are returning the company's operating margins to the Indian IT industry average and regaining the 53 customers it lost after the scandal.

Progress on both fronts has been slow. Gurnani said operating margins of eight per cent had been kept down by the need to invest in new technologies such as cloud and smart grids, while the company has only won back about five per cent of its departed customers.

"It's taken longer [to build up the company's margins] because to a large extent my rationale was that I should make some technology investments since the company went through the drama of not making enough technology and infrastructure investment," Gurnani said.

However, the company is making some headway in its battle to reclaim its position at the top table of the Indian software and IT services market.

In September last year it restated accounts dating back to 2002 - clarifying the company's financial position and helping remove any doubts in the minds of potential customers.

And its customer book is swelling once more. In the past year and a half Mahindra Satyam won another 50 clients and experienced a "boom in demand" for services from financial-sector customers in the UK.

"Between September and March the whole regaining process has started. We are winning new customers and the company is back onto a very positive trajectory," Gurnani said.

"We don't look at or talk about the past anymore. Everybody is focused on the future and we know we are doing the right things."

After making a loss of 81.77bn rupees in the financial year to March 2009 and a loss of 1.25bn rupees in the financial year to March 2010, the company's results have edged back into the black, with a profit after tax of 590m rupees for the quarter to December 2010.

The company is also ...

Topics: Tech Industry


Nick Heath is chief reporter for TechRepublic UK. He writes about the technology that IT-decision makers need to know about, and the latest happenings in the European tech scene.

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