Sasken Communication undergoes revamp as it seeks to revive growth
New CEO Anjan Lahiri creates new business and service lines, brings in a new management team as the troubled firm seeks to revive growth
Bangalore: Troubled mid-sized software services firm Sasken Communication Technologies Ltd has undergone an organizational revamp under new chief executive Anjan Lahiri, who has created new business and service lines, poached executives from rival firms and put in a new management team as the company attempts to revive growth.
Sasken, which hit a rough patch in the mid-2000s amid declining telecom orders, for now is aiming to maintain at least flat revenue growth for the next few quarters, two executives with knowledge of the developments said, requesting anonymity.
“Ever since he came in (in August 2013), Anjan has brought in his own team and revamped the organization structure. The broad agenda is obviously to revive growth. Hopefully we’ll start seeing results within a year from now,” said a Sasken executive, one of the two people aware of the developments.
Lahiri was one of the 10 professionals from Wipro Ltd and Cambridge Technology Partners who came together to launch Mindtree in 1999.
The Bangalore-based Sasken, which previously had one large vertical structure called engineering, research and development, has created two business divisions, one focusing on traditional IT services and the other on communications and devices.
The IT services business is headed by Milind Sathe, a former employee of Cognizant Technology Solutions Corp. and Mindtree, and Gajendra Singh Hiran is heading communications and devices. Sathe joined Sasken in October and Hiran in March.
The company has also created four other verticals, two of them focusing on infrastructure services and applications and data services (which includes cloud computing and analytics).
For infrastructure services, Sasken has roped in Anindo Ganguli, who previously handled large outsourcing contracts in Europe for Wipro.
Sasken declined to comment due to the mandatory so-called silent period ahead of announcing its financial results on 25 April.
“Anjan Lahiri is an old hand in the industry. You need to give him and his new management team some time before they can show some results,” said Anirban Dutta, director at Jet Age Securities Pvt. Ltd, a broking firm. “That said, if the turnaround plan is really working, we should ideally start seeing results over the next 2-3 quarters or so.”
Sasken was an investor favourite in the early 2000s, then seen as one of the most promising Indian IT and telecom services firms.
The company’s initial public offering was a hit, with its shares debuting on BSE on 9 September 2005 at Rs.400, a 54% premium to its offer price of Rs.260. The issue was oversubscribed eight times. By the end of that year, the share price was about Rs.600.
Since then, the stock has lost nearly 60% of its value. But over the past year, Sasken has gained about 40% and ended Tuesday at Rs.190.85 a share.
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.
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