Mahindra Satyam CEO on the road to recovery

Mahindra Satyam CEO on the road to recovery

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

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TOPICS: Tech Industry
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...take on the likes of Wipro and TCS, and regain Satyam's position as one of India's top five IT suppliers.

Wipro, for example, recorded a net income of 13.19 billion rupees for the quarter to December 2010.

Stormonth said: "I don't see how it can overtake," adding that Mahindra Satyam does not have deep enough pockets to expand through acquisition at the same rate as the top-tier suppliers.

Hyderabad

Hyderabad is one of the Indian cities where Mahindra Satyam is expanding its operationsPhoto: Nick Heath/silicon.com

"The results for the quarter ended December 2010 did not show the type of uptick that all the top four Indian vendors achieved," she said.

The forthcoming merger between Mahindra Satyam and Tech Mahindra could help to achieve Gurnani's goal of growth.

Gurnani said he is hoping to present the merger proposal to the board around the end of May and that the process could be complete by March 2012.

The merger will create a company with a sizeable customer base - today, both companies have almost 350 customers between them - and that offers a broad portfolio of services.

"Tech Mahindra in a lot of ways was dependent only on telecoms customers," Gurnani said, adding "for Tech Mahindra, it's a unique opportunity to double its revenue".

But even combined, Tech Mahindra and Mahindra Satyam still have gaps in expertise, Stormonth said.

"TechMahindra simply does not have the experience to handle many large accounts, and lacks industry domain expertise outside telecoms," she said.

"Satyam had industry-specific capabilities in manufacturing. Like telecoms, [it is] not the strongest vertical at the moment."

Stormonth highlighted the financial services sector as an area where Mahindra Satyam is "relatively weak", adding "there are some niche areas of IP, but with no clients".

Stormonth also has concerns about what she said is the company's failure to carry out a promised "major investment" in its BPO capabilities, and highlighted the fact that Mahindra Satyam's BPO operation "is still loss-making".

However, in spite of doubts from some industry analysts, Gurnani remains optimistic about the company's prospects.

"We will definitely surpass the number-four spot. I am looking at five years [to achieve that]. Through both organic and inorganic growth we will be a significant player in the market," he said.

Topic: Tech Industry

About

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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