CP Gurnani, chief executive officer, Mahindra Satyam, says the company has taken very little time to turn around its fortunes. Mahindra Satyam, plagued by large customer attrition, excess manpower, exodus of clients, legal activities and excess infrastructure, is now looking up, he tells FE?s BV Mahalakshmi. The CEO is hopeful that with active support from the government and its parent company, Tech Mahindra, it is now ready to take on the world and become a full-grown ICT company with technology as the core differentiator.
How do you look at the roadmap in the days to come? What would be the core strengths in order to become an ICT company?
We are on a challenging journey to transform this company, which a few quarters ago faced an unparalleled crisis. We have a clear roadmap for the journey, our go-to-market strategies are showing results, and significant investments are being made into our traditional strongholds like enterprise business solutions and integrated engineering services. We would make committed investments into platform-based BPO solutions and emerging technologies that will create the right platform to service our customers.
What is the current loan balance? Do you feel that the company is now debt-free?
The loan balance as of March 31, 2010, was Rs 42 crore. Tech Mahindra had injected Rs 2,900 crore and we have Rs 2,170 crore cash in hand. About Rs 700 crore to Rs 800 crore was used in extraordinary expenses for removal of debt. We are currently debt-free except for few personnel. We have retired some debts and are in fact restarting construction activities in Bangalore, Hyderabad and Chennai. During FY10, our margins have improved to 8.33% from 3.42% in the previous year. The net worth has improved to Rs 1,800 crore as compared to a negative networth at takeover of Rs. 8,080 crore.
Given the fall in clientele, how do you see the business growing? Is there a new silver lining for newer customers?
After the scam surfaced in January 7, 2009, the number of clients of the company came down to 350 in FY10 from 500 in FY09. As on March 31, 2010, we have added 44 new clients and are successfully present in all the three predictive markets ? US, Europe and APAC or the emerging markets. We had the largest losses in the financial services segment, but added a new client in this sector, we bagged a large account in North America, a large bank in Germany, largest bank in Australia. There has also been additions in manufacturing, healthcare, public sector. Also, we had a large support from the government. The ministry of corporate affairs helped us to talk to various government departments. Incidentally, we are actively bidding for government projects and one among them is the recent one from UID. Backed by Tech Mahindra,we have a fairly robust balance sheet, and should be allowed to consider based on our strengths and competencies.
What is the current status of the inter-corporate deposits in the Maytas deal?
The matter is still under sub-judice and we do not want to comment.
Is brand Satyam still holding a good bit of bad baggage or has it shaken it off?
ERP will continue to be the key strength of the company. We will continue to invest and grow on business in this sector. We are conscious and have differentiated the company. We would be working on co-innovation with partners. The crown in the jewel would be our ERP business. We have taken many cost-cutting measures such as downsizing, relocation of office premises, reducing some operational expenses, etc but the fruits of these measures can be reaped only after two years.