Bangalore: “IT services firm Mahindra Satyam’s customer attrition has stopped and it is not resorting to price cuts to bag new deals,” Atul Kunwar, president, global operations said.
“Mahindra Satyam has added about 36 clients since July and currently has about 420 customers,” Kunwar said at the Reuters India Investment Summit.
The company, which counts General Electric Co, Cisco Systems and GlaxoSmithKline Plc among its top clients, has renewed over 50 deals in the last three months.
“A lot of these are multi-year deals,” Kunwar said.
The company is witnessing an uptick in demand in areas such as manufacturing and digital convergence, currently its largest revenue-generating segments, and healthcare and life sciences.
“Another area that is seeing some pent-up demand starting to come into the open is oil and gas and utilities,” Kunwar said.
Mahindra Satyam, earlier known as Satyam Computer Services, was acquired by Tech Mahindra in April after the firm was hit by India’s biggest corporate fraud, which came to light in January.
Tech Mahindra, a unit of tractor and utility vehicle maker Mahindra & Mahindra, owns about 43% of Mahindra Satyam.
Mahindra Satyam’s Kunwar said that the company is working on reviving contracts with customers who left in the wake of the scandal, and is in talks with the World Bank to lift an eight-year ban imposed last December.
“The company, which is looking at expanding its board with independent directors, is not seeing any payment delays,” he said.
SHRINKING VIRTUAL POOL
“Mahindra Satyam has nearly halved the number of employees in its virtual pool and does not have a hiring freeze in place,” Kunwar said.
“Out of the roughly 8,900 people who actually went into the virtual pool, at this stage, it is less than 5,000 who are there,” he said.
In June, the company announced a ‘virtual pool’ programme under which employees, who had not been working on any outsourcing project for three months, were sent home for up to six months on a reduced salary structure to cut costs.
“A significant number have come back into projects, some people have decided to move on into other assignments and other companies,” Kunwar said.
He added that the company has brought back variable pay, rewards and performance appraisals, and introduced associate stock option plans for senior- and mid-level employees.
The company, which currently has about 35,000 employees, is also hopeful of completing the restatement of its accounts before the deadline of 30 June, 2010.
Shares in Mahindra Satyam closed down 11% at Rs90.55 in the main Mumbai market that closed up 0.4%. The stock has doubled in value since Tech Mahindra took over the company in mid-April.