Bangalore: Troubled mid-sized software firm Sasken Communication Technologies Ltd aims to revive sales growth by early next year through the leadership of new chief executive Anjan Lahiri.

Lahiri, who was head of MindTree Ltd’s information technology business, joins Sasken at a time when the company faces declining orders in its key telecommunications business. Revenues have plunged by nearly half over the past decade to 115.4 crore.

Lahiri replaces founder Rajiv Mody, who will remain as chairman of Bangalore-based Sasken, which was started in a Fremont, California garage in 1989.

“When we saw the opportunity and when there is a marriage of the minds, there is no need to wait," said Mody, who approached Lahiri for the top job after he quit MindTree in May. “We want it to be a professionally managed company, and not a promoter-managed company. Hopefully, we’ll set an example and transition out smoothly."

“I think we should be able to work to turn it around in the other direction by Q3 and Q4 this year," he said.

“I want to meet customers globally. Obviously, there is a sales focus, so I’ll probably turbocharge that a little bit," said Lahiri. “When I say stabilize things, it primarily is the sales."

In the June quarter, the company’s revenues declined by 13% to 115.4 crore. Sasken also faces an above-average rate of attrition, which stood at 37% in the latest quarter. The industry’s average attrition rate is 15-20%, according to experts tracking the sector.

Sasken was once widely seen as one of the most promising Indian IT firms as it became an investor favourite in the early 2000s.

The company’s initial public offering (IPO) was a hit, with shares debuting on BSE on 9 September 2005 at 400, a 54% premium to its offer price of 260. The issue was oversubscribed eight times. By the end of the year, the stock price was at 600.

Sasken’s problems were exacerbated by the consolidation in the telecommunications industry, with companies such as Nokia Oyj and Motorola moving to operating systems from the likes of Microsoft Corp. and Google Inc., and also due to the heavy reliance on its top 10 customers, which contributed more than 60% of its revenue in its latest quarter.

Nearly a decade after the share sale, the stock lost 0.13% to 113.90 on BSE, having plunged to less than one-fifth of the high it touched in late 2005. The benchmark Sensex lost 1.56% to 18,307.52 points.

Experts tracking the company welcomed Lahiri’s appointment but warned that a turnaround might take long.

“There’s no doubting Lahiri’s capabilities; he’s a born salesman," said Debashish Mazumdar, senior research analyst at Way2Wealth Brokers Pvt. Ltd, a brokerage. “Nobody can perform magic and script a turnaround in a night’s time. It will take one or two years at least."

The appointment will give Sasken an edge in marketing, said Anirban Dutta, director at Jet Age Securities Pvt. Ltd, another broking firm.

“Lahiri is a seasoned sales executive, so from a marketing point of view, this is a good move," said Dutta.

Lahiri also has relatively less exposure to the telecommunications industry, the sector from which Sasken derives most of its revenues.

“We also need to keep in mind that Sasken is a telecom-focused company and Lahiri’s exposure to that sector is comparatively low," Mazumdar said. “There are some doubts on how Lahiri’s past experience will help them get new business." Even bigger rivals such as Infosys Ltd and Tech Mahindra Ltd are struggling to gain new business from the telecom sector.

“Telecom as a vertical is not performing for anybody, whether it be Infosys or Tech Mahindra," said Mazumdar. “When the industry is struggling with performance, Sasken will also find the going difficult."

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