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

After Cognizant, Mahindra Satyam to fund employee ideas

May 16th, 2012

When outsourcing services provider Cognizant Technology Solutions launched Cognizant Capital in 2008 to encourage entrepreneurial spirit among employees, they may not have expected rivals to follow suit.

Now, Cognizant’s Hyderabad-based peer Mahindra Satyam has created an entrepreneurial fund that will help employees execute ideas that could eventually contribute to company’s revenues.

Employees with ideas can approach the firm’s board, which will whet ideas and recommend selected ones to be funded with not just financial capital but also human capital.

“Young employees are well equipped to provide new services as a product in the areas of e-commerce and mobility. So, instead of them quitting to start their own venture, this allows them to pursue it while being part of Satyam,” Manish Mehta, chief vertical solutions officer said.

For now, Satyam has set aside about $8 million or about Rs 43 crore for this programme, where in employees get about a year’s time to get the venture to start contributing to Satyam’s topline. Only ideas, with potential to fetch revenues of $10 – $12 million annually will get funding.

The average investment ploughed into each idea would be around $2 million. Satyam expects to get about three to four good ideas by the end of this year. “We recognise the need to propel young associates with a hungry mindset,” said Hari T, head of human resources.

“This will not only help us broaden our bandwidth of service offerings, but also aid us in increasing revenues.” Interestingly, new Satyam is inadvertently taking a leaf from its earlier promoter B Ramalinga Raju, who had a similar programme, back in 2002.

Mehta, who is driving this initiative for Satyam said: “Having supported the business model, we will have to take on the risk of failure and the employees will be given the option of getting back to their previous roles within the organisation”.

Dipen Shah, Institutional Head, Kotak Securities said: “This is similar to the incubation fund that Infosys had many years ago where companies such as On Mobile were supported. It not only helps them to increase profitability through these ventures enabling them to bag more deals in new areas like social media but also helps in retaining talent within the firm by encouraging entrepreneurship”.

Patni Computers too had a similar programme for its employees before it merged with iGate. Cognizant’s Sukumar Rajagopal, a senior vice-president and global head of innovation, said that such incubation is becoming increasingly important when customer requirements can only be met through innovation.

Cognizant follows a distributed model of innovation where every employee is encouraged to innovate in the organisation. Cognizant has an internal board that screens, selects and reviews business plans, allocates funds and/or resources in a staged model patterned after the Silicon Valley venture capitalist firms.

Prominent among such ideas is Cognizant 2.0 or C2 that provides a virtual “town square” for more than 140,000 Cognizant associates and over 100,000 active users who collaborate on hundreds of projects worldwide.

Source:http://economictimes.indiatimes.com/tech/ites/after-cognizant-mahindra-satyam-to-fund-employee-ideas/articleshow/13159422.cms

Mahindra Satyam’s Australian unit aims to hire 5, 000 by 2015

March 29th, 2012

Mahindra Satyam’s Australia unit plans to make acquisitions worth $50-100 million and become a $750-million company by 2015, a media report has said.

“We’re on the lookout for major acquisitions, anywhere from $50 million to $100 million. The treasure trove is reasonably big and Australia is a big market for us on a worldwide basis,” Mahindra Satyam Head (Australia and New Zealand operations) Venki Prathivadi said in an interview to ‘The Australian’.

Earlier this month, the diversified Mahindra Group announced the long-awaited merger of Mahindra Satyam with its another technology arm Tech Mahindra in an all-share deal that would create India’s fifth largest software firm with an estimated annual revenue of about $2.4 billion.

Speaking on the Australia and New Zealand operations, he said, “Our business is one of the most profitable in the Mahindra Satyam group. With the profits that we have generated and the growth standards that we have here, we’re looking for acquisitions in banking and financial services, healthcare, mining.”

The company is also looking at ramping up hiring with special focus on building domain skills, he added.

“Business had never been better, and it had even cracked the lucrative federal government market. By 2015, the goal is to have 5,000 employees and the objective is to be a $750 million company,” Prathivadi said.

“We doubled in revenues over the last three years and the objective is to double again in the next three years.”

After the merger with Tech Mahindra is completed this year, 80 per cent of the employees would cater to Australian customers, it would have 2,250 staff in Australia and New Zealand.

Despite troubled times, the company added 15 new customers in one year’s time, the report quoted him as saying.

“We’ve set ourselves a goal of finding one new customer every month,” he said, adding, “This is a local target…It’s a goal I set. We’ve been doing very well with existing business, but we had to do this in terms of real recovery. Major customers include Qantas and National Australia Bank”.

Prathivadi said that Satyam was working with unnamed Canberra-based companies to deliver services to public-sector users. The company also aims to hire at least 100 people to be based in Canberra.

He said an aversion to using India-based IT outsourcing companies was changing in Canberra, due to the “competitive advantage that we bring”.

Prathivadi claimed that one of Satyam’s strongest weapons was its ability to deliver quality work for 30 per cent less than its rivals and that people with SAP, Microsoft and Oracle technologies would be highly sought after by Satyam.

It hopes to dip into a “reasonably big” treasure trove to acquire local companies but not necessarily in the IT space.

Source:http://articles.timesofindia.indiatimes.com/2012-03-27/software-services/31244514_1_venki-prathivadi-mahindra-satyam-head-australia-and-new-zealand

MSatyam & TechM merge to form $2.4bn IT co

March 22nd, 2012

The $14.4-billion Mahindra Group on Wednesday unveiled the widely anticipated merger of its two IT services firms, Tech Mahindra and Mahindra Satyam, creating a $2.4-billion entity, which is poised to be India’s fifth-largest software outsourcing company by revenue.

The development comes three years after the group acquired the scandal-rocked Satyam Computer Services, later branding it Mahindra Satyam.

As part of the merger, investors will get two Tech Mahindra shares (of Rs 10 face value) for every 17 shares of Mahindra Satyam (of Rs 2 face value). The group will own 26.3% in the combined entity while British Telecom, a strategic partner of the group in Tech Mahindra, will hold 12.8%.

Since Tech Mahindra currently holds 42.65% in Mahindra Satyam (through Venturbay Consultants ), 10.4% equity of the new entity that will come in existence because of this cross-holding , post merger, this equity will be held as treasury stock in a trust, said the management at a press briefing in Mumbai on Wednesday.

Following the announcement, Dalal Street gave its stamp of approval to the plan with Tech Mahindra stock closing up 5.5% at Rs 684 while Mahindra Satyam (still listed as Satyam Computer on the bourses) closed 4.6% up at Rs 78. At the day’s closing levels, the two entities together are valued at a tad over Rs 17,800 crore (about $3.5 billion ).

The new entity, the branding of which will be decided over the next few months, will compete with the likes of Tata Consultancy Services, Infosys and Wipro for bagging big international outsourcing contracts. Tech Mahindra will issue 10.34 crore new shares, increasing its number of outstanding shares to 23.08 crore and its equity capital to Rs 230.8 crore, said the management. This values Satyam at Rs 76.3 a share ($1.8 billion), according to Bloomberg.

“This merger does not bring about any cost savings . Instead, it’s driven by the proposition of delivering better value to our customers , and project the power of one,” said C P Gurnani, CEO, Mahindra Satyam.

The management said there will be zero redundancies post merger but did not rule out some redeployment at the leadership level across functions. Mumbai will be the new headquarter for the merged entity.

“We did the merger when Mahindra Satyam reached normalization and was in a steady state so that it’s a merger of equals,” said Vineet Nayyar, vice-chairman & MD, Tech Mahindra and chairman, Mahindra Satyam. The joint entity will have a unified goto-market strategy with revenues spread across telecom , manufacturing, media & entertainment, banking and insurance, along with retail and healthcare.

The new entity will leverage Tech Mahindra’s expertise in the mobility vertical while Mahindra Satyam’s diverse clientele will come in handy to widen the client base of the company. “This makes strategic sense for Tech Mahindra, giving it access to other verticals, scale benefits and a wider geographic presence,” said Citigroup analysts in their report on Wednesday.

Source:http://timesofindia.indiatimes.com/tech/news/software-services/MSatyam-TechM-merge-to-form-2-4bn-IT-co/articleshow/12368101.cms

Mahindra Satyam, SBI Holdings set up $50mn fund

February 22nd, 2012

Hyderabad-based IT consulting and outsourcing company Mahindra Satyam, in association with Japanese venture capital firm SBI Holdings (SBIH), has set up a $50-million (Rs 246.4 crore) joint investment fund to invest in ICT companies globally.

The two firms have put in equal amount to raise the fund, which would be used for investing in companies that focus on emerging areas such as mobility, social networking, security solutions and cloud, according to a company release.

CP Gurnani, chief executive of Mahindra Satyam, said, “Investments in enterprise mobility and collaborative applications are the leading IT investment priorities for businesses in 2012 with infrastructure consolidation, virtualisation and security upgrades in the second tier. This path breaking fund, managed by SBIH’s expertise in this domain, will be an accelerator for our growth.”
The fund would be subject to regulatory and other approvals.

Kitao, chief executive officer of SBIH, said, “Combining the two firms’ complementary strengths, the fund will create an investment platform which will enable the fund to capture lucrative opportunities in the global ICT sector.” SBI Holdings, a global internet-based financial conglomerate, manages more than $3 billion.

The company’s scrip is currently trading at Rs 74.4 over the previous close of Rs 74.2.

Source:http://business-standard.com/india/news/mahindra-satyam-sbi-holdings-set50mn-fund/158520/on

High court’s I-T relief for MSat

February 2nd, 2012

The AP high court on Tuesday stayed the moves of the Income Tax department to encash the bank guarantee worth Rs 617 crore tendered by Mahindra Satyam. Granting an interim relief to IT consulting and outsourcing firm Mahindra Satyam, the court also ordered a status quo on the assessment proceedings.

Under the directions of the Supreme Court, the company deposited a bank guarantee of Rs 617 crore last April with the I-T department against its notice for the same amount from 2003-04 to 2008-09, the years for which Satyam Computers, the erstwhile owners of the company, was asked to pay tax. The bank guarantee that Mahindra Satyam subsequently furnished was valid until December 31, 2011.

Earlier, when the Central Board of Direct Taxes wanted to encash the bank guarantee, Mahindra Satyam moved the Andhra Pradesh High Court requesting for relief as the date of encashing the guarantee had lapsed and that it was challenging the CDBT’s fundamental claim of taxing the fraud-hit firm. The Income Tax department slapped this notice after disallowing exemptions claimed by the company.

The company has received draft notices of demand for Rs 1,037 crore and Rs 1,075 crore for assessment years 2002-03 and 2007-08. Ever since payment was demanded of Satyam, the firm has been constantly engaging with the tax department saying the computation of the tax dues were made based on the fictitious revenues recorded by B Ramalinga Raju, the founder of Satyam. Satyam has been seeking return or adjustment of taxes paid on inflated income when the company was still managed by the former management.

Mahindra Satyam has in several writ petitions filed before the AP High Court, challenged the re-opening of the assessment of AY 2002-03 and sought directions that fresh assessments should be carried out after removing the fictitious sales and fictitious interest.

All through, the I-T department has said there is no provision in the income tax law that allows a company to understate its income and re-compute tax liability after the assessment has been completed.

In August last year, the I-T firm set aside Rs 400 crore as provision for taxation anticipating a demand for payment of tax.

For the quarter ended June 30, 2011, it paid taxes of Rs 42.55 crore and Rs 58 crore for 2010-11. The company also challenged in the high court the I-T department’s decision to call for a special audit of accounts for 2001-07. Satyam Computer Services, which was hit by a Rs 7,000-crore fraud committed by its owner B Ramalinga Raju, was taken over by the Mahindra group in 2009 and renamed Mahindra Satyam.

Source:http://timesofindia.indiatimes.com/city/hyderabad/High-courts-I-T-relief-for-MSat/articleshow/11707326.cms

Mahindra Satyam names 123 in lawsuit

January 11th, 2012

Information Technology (IT) consulting and outsourcing company Mahindra Satyam, (formerly known as Satyam Computer Services) has made 123 people defendants in the lawsuit filed against its former board of directors, certain employees and the company’s former audit firm Price Waterhouse (PW), a source close to the development said.

These include Ram Mynampati, former president and interim CEO of Satyam, and the previous management, comprising founder-chairman B Ramalinga Raju, his brother and former managing director B Rama Raju, and former chief financial officer Srinivas Vadlamani.

“Also included in the list are four former employees of Satyam’s finance department, who are being prosecuted by the Central Bureau of Investigation. PW India, PW US and their partners are also in the list,” said the source, requesting anonymity.
When contacted to enquire about why the Mahindra Satyam management delayed in filing the lawsuit, a company spokesperson, who didn’t want to be named, said they were awaiting the right time.

“We already had major cases like Upaid, SEC and the US class-action suits and didn’t want to deviate from those important issues. Now that they have been settled, we went ahead with the case against the former management and others,” the spokesperson said, confirming that Mahindra Satyam bosses had received emails with regard to the civil suit filed by PW India against Satyam.

The source said Mahindra Satyam may seek more damages than the amount it sought in the petition. “Though the company agreed to settle some issues, which involved huge payments, the total amount for settling these cases was not paid as the Indian government’s Authority for Advanced Ruling approval has not yet been in place. Once they are settled, the damages may go up. To that extent, the company has reserved the right to seek more damages,” he said.

The scheme of Advance Rulings has been introduced under the Income Tax Act, 1961, to provide facility of ascertaining the income tax (I-T) liability of non-residents, to plan their I-T affairs well in advance and to avoid long-drawn and expensive litigation.

Mahindra Satyam had settled its cases in the US after paying $125 million (Rs 6.591 crore) to close its class-action suits, and $70 million (Rs 368.9 crore) to Upaid Systems.

UK-based Upaid had filed a case against Satyam in December 2009 pertaining to alleged forgery in the transfer of certain software to Satyam. Another $10 million (Rs 52.7 crore) was incurred in settling with the US Securities and Exchange Commission.

According to the source, the contents of the lawsuit filed against the former management would become a public document in a week as it has to go through several stages within the court process.

“The court has already given the number (to the petition). But this being filed in a civil court, it is still in the initial stages. It would take a week for the record to become final,” the source said.

Source:http://business-standard.com/india/news/mahindra-satyam-names-123-in-lawsuit/461439/

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