Posts Tagged ‘Mahindra’

Rupee fall, strong Tech Mahindra results boost IT stocks

May 22nd, 2013
Most IT stocks gained around 1 percent on Wednesday as the the recent rupee depreciation coupled with a steady demand environment is seen boosting earnings of outsourcing firms in the April-June quarter, although the US immigration bill still remains a concern, analysts said.
Tech Mahindra  was the highest gainer, surging 7 percent, on the back on better-than-expected earnings in its fourth quarter.
A US senate panel on Tuesday approved legislation, which will give millions of immigrants living illegaly in the US, an opportunity of the country’s citizenship, and eases some of the strict hiring requirements targetted at US high-tech firms in the earlier draft.
“The US immigration is still to be passed and so that will continue to remain a overhang on IT companies. But the rupee has depreciated to over Rs 55 to a US Dollar, which will help their earnings…Tech Mahindra results were also better than expected,” Angel Broking analyst Ankita Somani told moneycontrol.com.
IT companies earn a large proportion of revenue in Dollars from US companies. So a falling rupee will give a big boost to their repatriated earnings.
Rupee was trading at Rs 55.55 to the US Dollar in noon trade on Wednesday.
CP Gurnani, Tech Mahindra’s MD said on Wednesday the company was optimistic about FY14, buoyed by its deal pipeline, business traction from recent acquisitions and leverage of business synergies with Mahindra Satyam  .
The company like several other software services exporters also said the US market was on the recovery path.
IT companies were hurt by uncertainties in the overall global economy last year, as companies slowed decision making and cut back discretionary spends.
But companies as well as analysts say improving demand environment will boost the overall growth for IT companies this year.
At noon, Tech Mahindra was trading at Rs 964, up 6 percent, Infosys  was up 0.8 percent at Rs 2,415.95, Tata Consultancy Services   gained 1.3 percent at Rs 1,494.15 and HCL Tech  rose 1.5 percent to Rs 747.85 on NSE. Most other stocks were up in 0.5-1 percent range.
Source:http://www.moneycontrol.com/news/business/rupee-fall-strong-tech-mahindra-results-boost-it-stocks_877827.html

Most IT stocks gained around 1 percent on Wednesday as the the recent rupee depreciation coupled with a steady demand environment is seen boosting earnings of outsourcing firms in the April-June quarter, although the US immigration bill still remains a concern, analysts said.

Tech Mahindra  was the highest gainer, surging 7 percent, on the back on better-than-expected earnings in its fourth quarter.

A US senate panel on Tuesday approved legislation, which will give millions of immigrants living illegaly in the US, an opportunity of the country’s citizenship, and eases some of the strict hiring requirements targetted at US high-tech firms in the earlier draft.

“The US immigration is still to be passed and so that will continue to remain a overhang on IT companies. But the rupee has depreciated to over Rs 55 to a US Dollar, which will help their earnings…Tech Mahindra results were also better than expected,” Angel Broking analyst Ankita Somani told moneycontrol.com.

IT companies earn a large proportion of revenue in Dollars from US companies. So a falling rupee will give a big boost to their repatriated earnings.

Rupee was trading at Rs 55.55 to the US Dollar in noon trade on Wednesday.

CP Gurnani, Tech Mahindra’s MD said on Wednesday the company was optimistic about FY14, buoyed by its deal pipeline, business traction from recent acquisitions and leverage of business synergies with Mahindra Satyam  .

The company like several other software services exporters also said the US market was on the recovery path.

IT companies were hurt by uncertainties in the overall global economy last year, as companies slowed decision making and cut back discretionary spends.

But companies as well as analysts say improving demand environment will boost the overall growth for IT companies this year.

At noon, Tech Mahindra was trading at Rs 964, up 6 percent, Infosys  was up 0.8 percent at Rs 2,415.95, Tata Consultancy Services   gained 1.3 percent at Rs 1,494.15 and HCL Tech  rose 1.5 percent to Rs 747.85 on NSE. Most other stocks were up in 0.5-1 percent range.

Source:http://www.moneycontrol.com/news/business/rupee-fall-strong-tech-mahindra-results-boost-it-stocks_877827.html

Corporate blogging yet to grow among IT firms

October 6th, 2010

Many social media experts strongly believe that the corporate blogs or blogging is a very effective tool to build good and transparent relationship between the top management and their employees, investors, customers, general public as well as media.

“Corporate blogs serve the purpose of sharing information such as business decisions, change in management or any other events that happen within the organization. It helps to keep the employees in loop and integrate them with the top management in a transparent and well-informed manner,” says Beth Kanter, a renowned social media expert.

While the IT industry runs on developing software applications, technology and solutions for business purposes, one could vouch for the tech sector to be highly blog-savvy compared to other verticals.

Though Indian IT firms, to some extent, have added a few elements of social media such as podcast, webinars, Facebook page and Twitter links on their company websites, they still lag behind their foreign counterparts when it comes to corporate blogging.

Take Mahindra Satyam, the beleaguered IT services firm which unveiled financial results for 2008-09 and 2009-10 last week. As the company’s website has a blog section, one could have searched for blog post from top management – like the chief executive officer’s (CEO) message addressing its employees post the results. But there was no such blog posts related to the company’s financial output on its portal.

While the media reported and analyzed the results in different ways, it’s obvious that such news reports could play on the minds of the company’s large workforce in terms of job security and future growth.

Ideally, in such situation, a blog post or message from CEO or top management could boost employees’ confidence and put an end to any speculations evolving from external world.

“Corporate blogs should be seen a key tool for getting genuine information about companies, its projects and businesses, its employees and customers. It should help to establish interaction with employees, investors, media and others,” says Sandip Dhedia, Blogsdna.com’s Editor-in-chief from Mumbai.

But it’s contrasting, how the Indian tech firms are pursuing corporate blogging.

Interestingly, Tata Consultancy Services (TCS), the IT services and outsourcing giant, doesn’t have a blog section on its website. On HCL website too, the blog section is absent.

“In India, corporate blogging is lagging behind as it was seen more as a personal or individual writing. Though corporate blogging is very important today, companies still have the legacy mindset as far as blogging is concerned. They don’t share the company’s day-to-day information, business and project updates on the blogs, even for their employees’ knowledge,” points out Dhedia.

Wipro Technologies, on the other hand, has a quiet active blog section, called Wipro blog, which shows the recent blog posts from top executives like Girish Paranjpe and Suresh Vaswani, the joint CEOs and board members of Wipro.

In addition, top tech experts like Anand Padmanabhan, senior vice president – Energy & Utilities, Anurag Behar, Wipro’s Chief Sustainability Officer (CSO) and others keep the company’s blog section active and updated regularly. These blog posts talk about key issues and topics such as new technology and business trends.

Even Infosys Technologies has a well-maintained blog section with regular posts contributed by the CEO and managing director Kris Gopalakrishnan, Infosys China’s chief operating officer (COO) Rangarajan Vellamore and other top executives.

Global tech and software enterprises like Oracle, Hewlett Packard (HP) and Dell have already set a trend in corporate blogging which not just talks of their own organizations but also tries to create dialog with other firms and leaders.

This makes their corporate blogs more informative, interesting and insightful for readers including both their employees and general people. However, Indian tech firms still need to learn a lot to gain maturity in order to fulfill the real purpose of corporate blogging.

Source:http://www.ciol.com/News/News/News-Reports/Corporate-blogging-yet-to-grow-among-IT-firms/142055/0/

Private equity firms circle BT’s $830m tech mahindra stake private equity firms circle BT’s $830m tech mahindra stake

October 5th, 2010

Apax Partners and Providence Equity are reportedly among the firms considering a bid for the stake, which is reportedly likely to be valued at $830m.

British telecoms giant BT currently holds around a third of the company, and is expecting a 30 per cent premium over the current market value for the stake.

An outsourcing and IT services focusing on the telecoms sector, Tech Mahindra posted revenues of INR11.3bn ($252.9m) for the quarter ending June 2010 , an increase of 1.9 per cent on the previous quarter, although operating profits were down 20 per cent to $46.4m, a fall attributed in part to currency volatility.

“It’s been a quarter where our performance has been impacted among others by adverse currency movements,” said Tech Mahindra vice chairman Vineet Nayyar at the time.

Both Apax and Providence have reportedly approached parent company the Mahindra Group for informal discussions of the stake sale after talking to BT.

Source:http://www.altassets.com/private-equity-news/article/nz19362.html

Indian software outsourcing industry receives a double whammy

September 21st, 2010

The successful passage of the latest anti-outsourcing legislation signals hike in the visa processing fees for foreign workers sent to US on work permit by foreign companies. The problem will be compounded even further if another proposed legislation, which advocates Visa refusal for foreign companies whose American office does have at least 50 percent local American workers. If this becomes a law it will be double whammy, especially for t Indian software outsourcing companies that are heavily dependent on the HIB visa for their outsourcing business.

The law will dramatically increase the operational costs and make software outsourcing companies from India, less competitive in a business environment, which is witnessing emergence of new entrants from countries like China, Eastern Europe, Latin America, Thailand and Vietnam. The latest development on the American anti-outsourcing front will deeply hurt major Indian software outsourcing companies like Infosys, TCS, Mahindra Satyam, Wipro and others, who every year depute large number of Indian software professionals to various American locations for onsite Software development and maintenance. The law will force them to curtail the Indian software workers in America, which in turn will hurt their business prospects.

The Indian software outsourcing industry will have to look a way around this anti-outsourcing law by adopting a more ingenious approach focused on offshore development to stay competitive in the software outsourcing market. They should at same time focus on making inroads into Japanese market, which is the second largest IT market after US. Wipro has opened development center in China because it provides them an easy road to the Japanese IT market. The other Indian software development companies, big or small should also exploring more greener pastures and at same time bring in more flexibility in their US-centric IT policy so that Indian software outsourcing industry can maintain its dominance in the world IT market, which it has successfully done for last twenty years, without any difficulty.

Actively involved in outsourcing to India Tatvasoft is a CMMI level 3 software outsourcing company and has a reputation of proving the best business solutions.

Source:http://www.freepressrelease.com/indian-software-outsourcing-industry-receives-a-double-whammy/86038/

Small IT cos to feel heat of ban on outsourcing

September 16th, 2010

Even as the Indian IT industry finds the recent speech by US President Barack Obama disturbing, industry experts says that the anti- outsourcing move will not have any immediate impact on its revenues.

However, they maintain that it may affect the business of small companies.

“The recent anti-outsourcing (move) is not going to impact the Indian companies as most of their businesses are with private companies. The private companies are still looking at India as their outsourcing partner and are not affected by rhetoric. However, the trend is certainly disturbing,” said Ameet Nivsarkar, vice president, global trade, Nasscom.

Similar sentiments were expressed by global networking giant Cisco.

“This is business is not driven by rhetoric but hardcore commonsense. US companies outsource because it is profitable and not just out of some political compulsions. So, large contracts will not be impacted. However, there may be certain disruption for small contracts and companies,” a senior official of Cisco said.

And with the mid-term elections to the Senate and House of Representatives coming up, there would be more noise on the anti- outsourcing front, said IT & ITeS industry body Nasscom.

Recently, the state of Ohio banned offshoring of jobs by government departments. This was followed by protests by Indian companies. The ban was followed by the Obama’s statement against outsourcing by American companies.

Last month, the US increased the fees for H- 1B and L1 visas, sought by Indian professionals and IT companies. The hike in fees is expected to put an additional burden of $ 250 million annually on the Indian IT firms.

However, there have been some concerns among the Indian IT companies on the US companies shying away from making long- term commitments.

“What is challenging is that companies are willing to commit for the short term but not the long term or the medium term. Because of this, it becomes challenging to do medium-to long-term planning,” S. Gopalakrishnan, chief executive officer (CEO) of Infosys Technologies had said in an interview at the World Economic Forum in China.

However, the Cisco official pointed out that companies are being held back from committing to long-term contract not by political sentiments but by economic concerns.

“The global economy has not recovered completely and so the companies are trading with caution before making longterm commitments. The concerns are similar in the European as well as other markets,” he added.

At present the $ 50- billion Indian IT industry gets over 60 per cent of its revenue from the US. Europe accounts for about 20 per cent of its revenue while the rest 20 per cent comes from Latin America, Middle East and other destinations.

And with the anti-outsourcing rhetoric getting louder, Indian IT companies have started looking for alternatives in other markets like Europe, Middle East and Latin America.

“It is not that the companies are not looking at the options.

We have already started looking at the options in Europe. The response is slow but good. Once the economy improves we will get many more deals and also from Latin America,” said an official from Infosys, who did not wish to be named.

Others like TCS, Mahindra Satyam and Mindtree are also considering European options seriously.

Even Nasscom is pitching for flexible work permits and single visas for European Union countries, which will reduce costs for the Indian IT industry.

Source:http://indiatoday.intoday.in/site/Story/112831/Business/small-it-cos-to-feel-heat-of-ban-on-outsourcing.html

Tech Mahindra dips as BT mulls IT recast

August 28th, 2010

The report also indicated that it may cut its global IT budget for FY11 by 50%, from US$1bn to US$500mn. BT may re-negotiate deals with existing vendors, the report added.

Shares of Tech Mahindra fell by close to 4% today on BSE after a business channel suggested that UK-based telecom giant BT is reportedly restructuring its global services unit and is likely to cut rates by 9-10%.

The stock has recovered some of the lost ground and was last seen down 2% at Rs681 after touching a low of Rs668 and a high of Rs700. Trading volume on the counter is very low at around 28,000 shares.

The report also indicated that it may cut its global IT budget for FY11 by 50%, from US$1bn to US$500mn. BT may re-negotiate deals with existing vendors, the report added.

India’s Infosys and Tech Mahindra do IT outsourcing work with BT.

Tech Mahindra is a joint venture between Mahindra & Mahindra and BT Group Plc.

Source:http://www.indiainfoline.com/Markets/News/Tech-Mahindra-dips-as-BT-mulls-IT-recast/4915903916

The end of outsourcing

August 11th, 2010

In the next five years outsourcing as we know it will disappear. The legion of Indian service providers will be sidelined or absorbed. U.S. and European companies that pioneered this corner of the high tech industry will suffer similar fates if they don’t wake up. Who will emerge as the new leaders? Google (GOOG) and Amazon.com (AMZN), brands that we associate with search and retail, will become better known for outsourcing.

Ludicrous? Not if you follow this industry. Desktop computers yielded to laptops. Web portals AOL (AOL), MSN (MSFT), and Yahoo! (YHOO) are giving way to social media sites Facebook, Twitter, and LinkedIn. Software once distributed by disk is now available as apps over the Web—often for less than the cost of a slice of pizza. And so it goes. The same Darwinian process is creating a fresh ecosystem in outsourcing, one that will usher in an era of consolidation and a new way of working with clients.

Traditionally, outsourcing companies sell customers deals that can span a decade and easily run to tens of millions of dollars. The service provider takes on the expensive, time-consuming task of building and operating the digital tools that the customer requires to vanquish the competition, often involving development of custom software to get the job done. To do that, service providers need aisles of powerful computers, armies of programmers, and lots of applications, which are housed either at the client’s site or located at a third-party data center that’s usually owned and paid for by the client but managed and maintained by the outsourcer. Accenture (ACN) is a good example of the old model of outsourcing, which involves long-term contracts; customized software, legacy software, or both; and on-site systems integration work.

Ruthlessly seeking economies of scale

In the new model, outsourcers provide standard, off-the-shelf software on a “pay-per-drink” basis. For that, they will leverage so-called cloud technology, which lets users tap into computing power available via the Internet, rather than on a desktop or computer server housed locally. The appeal is scale, flexibility, and efficiency: Thousands of server computers can attack a task more quickly—and cheaply—or handle a patchwork quilt of different technologies that companies use to run their businesses. This approach will let businesses outsource entire tasks such as the tracking of inventory, paying only for the information accessed or used.

Why is this happening now? Let’s start with the relentless pressure to cut costs. Outsourcing is about saving money. Sure the pitch usually revolves around improving business processes, but no client is going to pay more for the service than what it already costs to maintain their systems. Unfortunately, outsourcing vendors have maxed-out efficiencies, both from automation and from moving the work to lower cost-of-labor destinations, also known as “labor arbitrage.” To get to the next level of savings, a ruthless search for greater economies of scale is necessary.

That’s where the cloud comes in. It shifts the center of gravity in outsourcing from physical ownership of assets and process expertise. It focuses on the skills necessary to efficiently manage computing operations that can scale and at the same time are flexible enough to handle scores of different tasks.

These factors will set off a wave of global consolidation in tech services. There are too many companies in this space. Consolidation will be about protecting or building market share or adding technical skills, from connectivity and networking to deep expertise in the delivery of services-on-demand. This is why most Indian outsourcing companies are investing to get up to speed on the cloud. How quickly can they build sufficient scale?

It’s not merely Indian companies wrestling with these changes. Let’s handicap the winners and losers in the race to become players in the evolving outsourcing business.

The Losers: Mid-tier Indian outsourcers will be acquired by larger, more aggressive companies. Indian outsourcers are attractive because of their current client list, operations in low-cost countries, and process expertise. Most of them are too small to build enough scale and expertise in the backbone capabilities required in the cloud.

Leading Indian players like MphasiS (MPHL:IN) and eServe (ESV:AU) have already fallen prey to Hewlett-Packard (HPQ) and TCS, respectively. Some larger players such as Infosys (INFY) and Wipro (WIT) are at risk of losing their competitive advantage. Even the largest Indian companies are still several orders of magnitude smaller than their U.S. competitors—HP, Xerox (XRX) Microsoft, and Google. These include companies such as Patni (PTI), L&T Infotech, and Satyam (recently acquired by Tech Mahindra. Therefore we expect Indian vendors to try to gain scale via acquisitions or alliances among themselves.

The Winners: Amazon and Google are the future leaders in outsourcing. They are already providing services to such enterprises as Eli Lilly (LLY) and Pfizer (PFE). They own data centers on an enormous scale and know how to operate them efficiently. They will gain capabilities they don’t yet have—such as industry-specific know-how and low-cost workforces—by acquiring Indian or other global outsourcers. Meanwhile, Google announced a partnership with Computer Sciences (CSC) and Amazon announced a similar one with Capgemini. Indeed, Amazon has made so much headway in cloud technology that this area of their business will generate, according to an estimate recently published by UBS (UBS), something in the order of $750 million in 2011.

Then there’s the generational issue to consider. Amazon and Google are household brands for the generation of managers and leaders that is now rising in U.S. management ranks. In their youth, these leaders entrusted personal e-mails, music files, pictures, and social interactions to these companies. We believe it will be a logical extension for this generation to hire these companies as trusted managers and hosts of their corporate services.

The Possible Winners: Software giants such as Microsoft, Oracle (ORCL), and SAP (SAP) have knowledge around enterprise platforms and applications that can unlock further efficiencies for clients. They also have robust and captive client portfolios. Their success will depend on the speed at which they build up capabilities they are currently missing in connectivity, infrastructure, and experience in the cloud itself. It will also depend on their appetite for risk. We are talking here about nothing less than reengineering their DNA. For example, even Microsoft has begun to forsake its license-based software to introduce new, cloud-based, office software. At the same time, Salesforce.com (CRM) has aggressively grown by shifting its CRM applications around this cloud-based model.

Those on the Fence: Xerox, HP, and Accenture have the technical and financial resources to expand their capabilities. Recent acquisitions—HP/EDS, Dell/Perot Systems (DELL), and Xerox/Affiliated Computer Services—show that they see the writing on the wall. Nevertheless, it’s uncertain that these behemoths will shift seamlessly from large integration projects to cloud-based solutions. Unless companies such as HP, Xerox, and Dell continue to increase their momentum into the cloud, they may find their multibillion-dollar acquisitions go to waste.

The outsourcing market is on the verge of experiencing its most massive transformation since the concept arose more than 20 years ago. For outsourcers, cloud computing creates an unprecedented opportunity to reshape how services get delivered. For clients, it opens up a new era characterized by the arrival of new players that are eager to build relationships and showcase their capabilities. That means more choice and a new model that will sustain the price advantage that outsourcing has hitherto provided.

Source:http://www.outsourcing-russia.com/docs/?doc=1890

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