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Tech Mahindra-Mahindra Satyam may be major IT player: IDC

August 25th, 2011

The merger entity of Tech Mahindra and Mahindra Satyam may emerge as a formidable competitive force in the Asia-Pacific region, especially for Indian IT service providers and other regional players, according to International Data Corporation (IDC).

IDC, a premier global provider of market intelligence and advisory services, further said the joint go-to-market initiatives between Tech Mahindra and Mahindra Satyam as the foundation for future integration proved to be a success model that clinched 10 new clients for Mahindra Satyam last year.

“A combined revenue base in excess of USD 2 billion with approximately 20 per cent coming from emerging markets (Asia-Pacific, Africa and the Middle East) will give the merged entity a strong growth story,” the report said.

The IDC Insight is based on presentations and discussions at a Mahindra Satyam analyst meet held on July 8.

“In addition, the merged entity will have a well-balanced split in revenue from the United States and European markets where its immediate competitors (ie Indian IT players) have found it difficult to maintain the balance,” IDC said in its latest report.

Commenting on margins, the report said in order to maintain margin levels, it will be essential to leverage Mahindra Satyam’s intellectual property and product delivery model.

Potentially, the next stage of consolidation after the Mahindra Satyam and Tech Mahindra merger would be to bring Mahindra’s business process outsourcing (BPO) services into the fold to build up the scale of its operations in domestic and global markets.

The joint initiative resulted in 10 new wins for Mahindra Satyam over the past year, including a transformation services deal for a telecom operator in Australia, transportation management solution for a major telecom operator in the United States, customer analytics for a major Canadian telecom operator and a cost reduction as well as compliance solution based on Oracle for GE-Energy.

“Going forward, the two companies have identified 20 telecom accounts for further focus across operational and billing support systems (O/B SS), decision support systems (DSS) and extended EBS,” the IDC report said.

“In the EBS space, focus areas will include business analytics, point of sale (POS) solutions for telecom retail stores and property management for telecom operators,” it added.

IDC also opined that in order to make the joint initiatives taken up by Tech Mahindra and Mahindra Satyam — which it dubbed the ‘M-Cube Advantage’ — work, it will be crucial to take the ongoing integration of Mahindra Satyam and Tech Mahindra to its logical conclusion.

At the customer panel in the analysts meet, representatives from leading corporates spoke highly of their experience with Mahindra Satyam and their commitment to continue further their relationship, IDC said in its report.

Source:http://www.moneycontrol.com/news/business/tech-mahindra-mahindra-satyam-may-be-major-it-player-idc_579893.html

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Tech Mahindra’s GCC penetration tops 100%

August 22nd, 2011

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With multiple projects underway across the Middle East, Indian IT outsourcing company Tech Mahindra said its penetration levels in the GCC exceeded 100 per cent.
Tech Mahindra, which posted a 15.4 per cent year–on-year growth to $289.8 million in global revenue in the first quarter of fiscal 2011-2012, said it plans to focus on expanding its footprint in Saudi Arabia and would step up investments to further bolster its regional foothold.

While Tech Mahindra has done projects in the IT space, the strategy is to offer a broader range of services to operators covering e-security, infrastructure management services and network services also to customers and prospects in the Middle East, the company, which is part of the Mahindra Group, said in a statement. “We continue to build our business portfolio at a measured pace, despite low discretionary spend in the telecom vertical. This has been enabled by our diversification into new geographies and customers,” Tech Mahindra Chairman Anand Mahindra said.

“The Middle East and Africa are clearly the emerging markets that are crucial for our growth,” said Krishna Gopal, Tech Mahindra Vice-President for MEA Sales.

“These markets offer us the opportunity to develop and showcase some of our high0end capabilities in terms of consulting, system integration and managed services. Our wins and healthy ongoing traction bears testimony to our growth momentum in the region and we will continue to leverage the same.”

“Operators are currently seized with the issue of controlling costs, increasing revenues and sweating assets. Tech Mahindra aims at addressing these issues by enabling businesses to focus on core business and handle key functions like IT and networks. Present trends also show an increased focus on market segmentation and customer loyalty,” the statement adds.

Some of the company’s offerings can be leveraged across key industry verticals. One that offers itself immediately is e-Security, where it has already started working with a leading bank in Dubai. In addition, software testing and infra services are areas where the company plans to use the Mahindra Satyam customer or prospect base to seek revenue streams.

Business process outsourcing, or BPO, and security are new areas of growth in addition to systems integration work.

In the second quarter, the company’s operating profit was $54.1 million and showed an increase of 16.6 per cent. Profit after tax was $61.7 million, representing a 96.3 percent increase and a 203.6 per cent quartet to quarter rise.

Tech Mahindra has also posted a total head count of 42,850 with 27,920 software professionals, 13,804 BPO employees and a support staff of 1,126. The company added 4,517 personnel during the first quarter, where 2,793 were in BPO.

Other developments during the first quarter include the decision to select Nigeria as the headquarters for Tech Mahindra’s BPO operations in Africa with operations already commencing in Gabon. The company has been selected by Microsoft to set up an authorised Encoder Conformance Testing Lab for video encoders used in deployment of IPTV solutions on Microsoft Media room based platforms.

“We have aligned ourselves with changing customer priorities and needs, which has helped us navigate in these volatile times. Our continued focus on core competencies has enabled us to show sustained growth across our key clients and geographies. The changing macro economic conditions could pose new challenges, which we are closely monitoring,” said Vineet Nayyar, Vice-Chairman, Managing and Chief Executive Officer of Tech Mahindra.

Source:http://www.khaleejtimes.com/biz/inside.asp?xfile=/data/business/2011/August/business_August359.xml&section=business

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Tech Mahindra posts 15.4% increase in global revenue for Q1 2011

August 15th, 2011

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Tech Mahindra, an IT outsourcing company offering web development, Offshore development, application development, software development and is part of the Mahindra Group, has released the consolidated financial results for its first quarter ending June 30, 2011, revealing a 15.4% Year-on-Year (YoY) growth in global revenue.

The report shows that revenue for the first quarter reached $289.8m, up by a 4.1% Quarter-on-Quarter (QoQ) growth. The company has also revealed some new wins during the first quarter for the Middle East and African (MEA) regions. With multiple projects underway across the Middle East, Tech Mahindra is enjoying penetration levels in GCC countries exceeding 100%. Operators are currently seized with the issue of controlling costs, increasing revenues and sweating assets. Tech Mahindra aims at addressing these issues by enabling businesses to focus on core business and handle key functions like IT and networks. Present trends also show an increased focus on market segmentation and customer loyalty.

In the Middle East region, Tech Mahindra has strong relationships with all operators and the company plans to focus on expanding its footprint in Saudi Arabia and are investing in efforts to make that happen. While Tech Mahindra has successfully done projects in the IT space covering OSS, BSS, ERP, EAI etc, the strategy is to offer a broader range of services to operators covering VAS, BPO, e-Security, Infrastructure Management Services and Network Services also to customers and prospects in the Middle East.

Some of the company’s offerings can be leveraged across key industry verticals. One that offers itself immediately is e-Security, where it has already started working with a leading bank in Dubai. In addition, software testing and infra services are areas where the company plans to use the Mahindra Satyam customer or prospect base to seek revenue streams. Also, with the recent contracts around Managed Services, Tech Mahindra has positioned resources and also hired resources locally. BPO and Security are new areas of growth in addition to systems integration work and managed services.

“Middle East and Africa are clearly the emerging markets that are crucial for our growth,” said Krishna Gopal, Vice President, MEA – Sales, Tech Mahindra. “These markets offer us the opportunity to develop and showcase some of our high end capabilities in terms of consulting, system integration and managed services. Our wins and healthy ongoing traction bears testimony to our growth momentum in the region and we will continue to leverage the same.”

Tech Mahindra also reported that revenue, in terms of a constant currency basis, came to $284.1m, which increased by 2% QoQ. The company’s operating profit was $54.1m and showed an increase of 16.6% YoY. Profit After Tax (PAT) was $61.7m, driving in a 96.3% YoY increase and a 203.6% QoQ. Tech Mahindra has also posted a total head count of 42,850 with 27,920 software professionals, 13,804 BPO employees and a support staff of 1,126. The company added 4,517 personnel during the first quarter, where 2,793 were in BPO.

“We continue to build our business portfolio at a measured pace, despite low discretionary spend in the telecom vertical. This has been enabled by our diversification into new geographies and customers,” said Anand Mahindra, Chairman, Tech Mahindra.

Other developments during the first quarter include the announcement of Nigeria as the headquarters for Tech Mahindra’s BPO operations in Africa with operations already commencing in Gabon. Also, the company has been selected by Microsoft to set up an authorized Encoder Conformance Testing Lab (ECT Lab) for video encoders used in deployment of IPTV solutions on Microsoft Media room based platforms.

“We have aligned ourselves with changing customer priorities and needs, which has helped us navigate in these volatile times. Our continued focus on core competencies has enabled us to show sustained growth across our key clients and geographies. The changing macro economic conditions could pose new challenges, which we are closely monitoring,” concluded Vineet Nayyar, Vice Chairman, MD and CEO of Tech Mahindra.

Source:http://www.ameinfo.com/273008.html

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Tech Mahindra nears deal with India Telco

July 1st, 2011

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Software company Tech Mahindra Ltd. is set to sign a large contract to provide call center services to a top mobile phone operator in India in a deal that is likely to push the pace of revenue growth at its business process outsourcing division beyond last fiscal year’s 26%.
A large deal for the company is usually in the range of $15 million to $150 million for three years, Sujit Bakshi, president, corporate affairs and BPO, said in a recent interview. Based on the volume committed by the telecom service provider currently, the deal is likely to earn revenue of more than $15 million in three years.

“We have tied up with them, but the [signing of a] master services agreement takes time,” Mr. Bakshi said, adding that the company will sign the agreement in a month’s time.

Tech Mahindra’s BPO division offers voice- and non-voice-based back office services to telecom companies, in line with its parent, which also focuses on providing software outsourcing services to the sector.

The BPO division’s clients include top telecom operators in India Bharti Airtel Ltd., Idea Cellular Ltd. and Reliance Communications Ltd.

Mr. Bakshi, however, declined to name the latest client, but said the company had signed a similar deal in the just-ended quarter with the same company in another market. In February, Tech Mahindra signed a contract with Vodafone Group PLC’s unit in Qatar to offer technical solutions to the telecom company’s customers.

Mr. Bakshi also said the estimated value of the deal is vulnerable to volatility in the mobile phone market in India, which recently let users change service providers without changing their phone numbers. “Especially with this churn [in India's telecom sector] from number portability, nobody will give a firm forecast for one year,” he said.

Pune-based Tech Mahindra’s note of optimism on its BPO business comes as growth in the sector lags the country’s high-profile IT services industry, weighed down by the global economic slowdown, declining billing rates offered by clients and higher staff costs.

The financial performance of the company’s main IT services division has also been patchy in recent years due to its overdependence on the telecommunications sector. Telecom service providers the world over have been hit by a drop in consumer spending after the global financial crisis.
Research firm Gartner Inc. expects the worldwide BPO market to grow at an average annual rate of 5% to $208 billion in 2014 from $172 billion in 2010.

The latest deal is also based on a pricing model in which Tech Mahindra can earn a margin over each call on the client’s network through efficient utilization of staff, Mr. Bakshi said.

Mr. Bakshi expects the latest deal, along with the large contract it received from Bharti Airtel in Africa last year and a multi-million dollar partnership with a telecom client in the Philippines signed earlier this year, to spur revenue growth in the division in this fiscal year.

In the last fiscal year ended March 31, Tech Mahindra’s BPO division reported $70.5 million in revenue. The BPO division accounted for nearly 7% of the company’s $1.13 billion total revenue. Revenue from Airtel in the last fiscal year was less than $1 million, Mr. Bakshi said.

He also expects the additional business it recently won from an existing client in the U.S. and the U.K. to power revenue growth this fiscal year.

Mr. Bakshi said the division is currently chasing a number contracts from most of the service providers in the developing African telecom market. Tech Mahindra recently opened an office in Nigeria, which will be the headquarters for its BPO business in the continent.

Source:http://online.wsj.com/article/SB10001424052702304584004576417120773645778.html

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Tech Mahindra to scale up BPO ops in Africa from Nigeria

June 28th, 2011

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Tech Mahindra has made Nigeria the headquarters for its business process outsourcing (BPO) and plans to scale up its African operations , the company said today.

“We are extremely excited to be part of the growing market of Africa. We have already helped our customers in Africa reduce their operating costs and generate new revenue streams.

Tech Mahindra has recruited over a thousand local employees in Nigeria and it is our strategy to nurture local talent for effectively executing our BPO operations,” Tech Mahindra President (Corporate Affairs & Business Services Groups) Sujit Baksi said.

Over a period of two years, we plan to reduce the expat head count considerably and develop the workforce locally to run the operations. Tech Mahindra has now joined the league of Indian IT companies with significant headcount in the region, Baksi said.

Over the last two years, Tech Mahindra has partnered with leading telecom operators in Nigeria, like MTN and Multilinks. The company has recently won the prestigious Bharti Airtel Africa deal for setting up Airtel’s BPO operations in seven countries.

“With its telecom domain expertise and global experience over two decades, Tech Mahindra is committed to offering best in the industry services to telecom operators leading to enhanced experience for the end consumers in Nigeria and the Africa continent as a whole.

Tech Mahindra would bring its global experience across developed and emerging markets to offer top levels of service to operators and end consumers in Nigeria,” Tech Mahindra Vice-President (Sales & Global Alliances) Krishna Gopal said.

Source:http://economictimes.indiatimes.com/tech/software/tech-mahindra-to-scale-up-bpo-ops-in-africa-from-nigeria/articleshow/9015184.cms

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Mahindra satyam triggers growth phase with increased q4 revenue

May 30th, 2011

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Mahindra Satyam, a leading global Consulting, IT and Business services provider today announced its consolidated financial results under Indian GAAP for the fourth quarter and year ended March 31st, 2011.

Financial Highlights for the Quarter ended March 31, 2011:

* Consolidated Revenue was INR 1,375 crores, up 7.5% QoQ
* EBITDA before exceptional items was INR 178 crores
* Profit After Tax (before exceptional items) was INR 245 crores, up 118% QoQ
* The extraordinary item pertains to the Class Action settlement reached during quarter
* EPS (before exceptional items) was Rs 2.08 per share in Q4
* PAT (after exceptional items) was INR -327 crores
* EPS (after exceptional items) was Rs -2.78 per share in Q4

Financial Highlights for the year ended March 31, 2011:

* Revenue was INR 5,145 crores, down 6.1% YoY
* EBITDA before exceptional items was INR 455 crores
* PAT (before exceptional items) was INR 494 crores, up 69% YoY
* EPS (before exceptional items) was Rs 4.2 per share For FY11
* PAT (after exceptional items) was INR -147 crores
* EPS (after exceptional items) was Rs -1.25 per share for FY11

Financial Highlights in USD (per Convenience Translation) :

* Fourth Quarter Revenue was USD 304 million, up 7.2% QoQ
* Q4FY11 Operating Profit (EBIDTA before Exceptional items) was at USD 39 million
* Q4FY11 PAT (before exceptional items) was at USD 54 million
* Revenue for full year was USD 1,128 million
* FY11 Operating Profit (before exceptional items) was USD 100 million
* FY11 PAT (before exceptional items) was USD 108 million

Other Highlights

* Our total headcount stood at 29,266 as of March 31, 2011, a net addition of 434 for the quarter and 1,729 for the year
* During the quarter Active Customer count stood at 230
* Attrition down to 22% in Q4 as compared to 25% in Q3FY11

Vineet Nayyar, Chairman, Mahindra Satyam, said, “This year has been a very satisfying one, given the impressive progress we made on various fronts such as minimizing the legal overhang, fortifying governance mechanisms, and restoring customer and employee confidence”. He also added – “Q4 is yet another quarter that demonstrated continuing progress on Growth, operational efficiencies, high delivery standards and investments into capability building.”

Speaking at the occasion, CP Gurnani, CEO, Mahindra Satyam, said, “At the end of the second year of our 3-year journey, we are very pleased with our achievements so far. Throughout the last year, we had many high points to cherish; new engagements, new logos, better than ever appreciation for our work and acknowledgement for our capabilities by customers and analysts”.

Looking forward, he adds – “We are acutely aware of the challenges that lie ahead in this transformation journey. Accelerating profitable growth and building capability to deal with the scale are our key focus areas. Our three-axes focus on Verticals, Geographies and Competencies continue, along with two-in-a-box customer centric engagement model would continue.” Key wins Mahindra Satyam continues its growth trajectory with multiple deal wins during this quarter.

* Roche, a global life sciences major headquartered in Europe, partnered with Mahindra Satyam for their IT lifecycle support services
* Qatar University selected Mahindra Satyam for Oracle EBS R12 implementation

In addition Mahindra Satyam announced many key deals during year that include

* Strategic partnership with BASF IT Services to enhance BASF’s capacity to provide managed services for the company’s extensive installed base of SAP, messaging, groupware as well as user administration
* SAP ERP implementation contract by Insurance Regulatory and Development Authority (IRDA)
* Multi-million, multi-year contract from Aspire Zone Foundation, Qatar. The foundation will also utilize Mahindra Satyam’s expertise in event and venue management technologies as part of its ambitious sports event and venue management solution roadmap

Operational Highlights Delivery

* Mahindra Satyam established a Windows Azure Center of Excellence (CoE) in partnership with Microsoft to provide Azure consulting, development and migration services to enterprise customers transitioning towards cloud
* Launched of Delivery xPress – a service delivery framework for accelerated service delivery
* Launched a single-window ‘Art-to-Part’ engagement model for partners in Aerospace and Defence. This partnership model covers both design and manufacturing areas to provide a seamless engagement experience for partners, covering the complete product development lifecycle including after-market services
* Mahindra Satyam BPO announced Partnership with Direct Channel Holdings (Pty) Ltd. Both the companies will exclusively co-operate in unlocking BPO (business process outsourcing) and KPO (knowledge process outsourcing) opportunities in Sub-Saharan Africa

Infrastructure

* Mahindra Satyam commenced SEZ operations at Hyderabad, India. The SEZ is spread across 26 acres, will have a built up area of 4,00,000 square feet. The first phase of the campus is now operational and will seat around 5,000 associates
* Mahindra Satyam achieved CMMI Level 5 Version 1.2-Development model certification for its development centres at Bangalore, Chennai and Pune. The assessment led by KPMG as per the SCAMPI methodology evaluated Mahindra Satyam on stringent parameters including implementation of Process Performance Models

New appointments

* Mr. Sriram Papani as Senior VP & Global Head, Enterprise Business Solutions. He re-joins the Mahindra Satyam family to handle some key responsibilities including partner relationship management, fostering leadership within the organization to sustain growth and to incubate and nurture emerging competencies
* Kunihiko Higashi appointed as Country Manager, Japan. In his new role, Kunihiko Higashi will be responsible for spearheading the overall operations, including sales, marketing, professional services and support. He will drive the company’s revenue and market share growth through the implementation of aggressive sales and marketing strategies and building the company’s channel programs in this market
* Mr. Srirama Srinivasan appointed as Vice President – Healthcare & Life Sciences. His core focus areas will be working on growing business in USA and Latin America for Mahindra Satyam. Srirama has 23 years IT industry experience with focus on Sales and Practice Management & Development

References and Recognition

* Mahindra Satyam featured in the ‘Challengers’ category in the report titled “Magic Quadrant for SAP ERP Implementation Service Providers, North America” published by Gartner
* Mahindra Satyam featured in “The Forrester Wave™: Global IT Infrastructure Outsourcing,Q1 2011″.
* Was profiled in a Gartner Research report “Who’s Who in Business Process Management Consulting and System Integration”,
* Zinnov acknowledged Mahindra Satyam as leader in providing automotive engineering services. The practice has been ranked in “Leadership Zone” by Zinnov in their annual Global Service Provider Rating (GSPR) 2010-2011
* Mahindra Satyam BPO honoured as ‘India’s Most Customer Responsive BPO Company’ at the ‘AGC Networks Customer Responsiveness Awards 2010′
* Announced as a Winner in 2010 NOA Awards: ‘BPO Contract of the Year’. Mahindra Satyam wins prestigious industry award in recognition of its BPO work, at 7th Annual NOA Awards Ceremony in Central London
* Won Oracle APAC FY10 OPN Enterprise 2.0 Partner of the Year Award

Source:http://www.auto-mobi.info/index.php?option=com_content&task=view&id=171832&Itemid=55

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Tech Mahindra enters billion dollar league

May 26th, 2011

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Tech Mahindra, India’s fifth largest software exporter, today announced consolidated financial results for its fourth-quarter and Year ended March 31, 2011. The fourth quarter revenue was at Rs. 1,261.5 crores; up 4.2% QoQ and Full year Revenue was at Rs. 5,140.2 crores; up 11.1% YoY. Tech Mahindra’s Net profit after tax (PAT) before share of profit/loss in associate was at Rs. 206.5 crores, up 0.5% QoQ.

For the Quarter, Tech Mahindra’s associate company Mahindra Satyam reported improved results with operating margins improving from 6.4 % in third quarter of FY11 to 13.0 % in the fourth quarter of FY11. Mahindra Satyam also announced the successful settlement of the US class action suit at a cost of USD 125 mn. Including this exceptional cost Mahindra Satyam reported a loss for the quarter. Tech Mahindra’s PAT including share of associate Company’s loss of Rs. 114.4 crores for the quarter was at Rs. 92.1 crores.

Source:http://www.indiainfoline.com/Markets/News/Tech-Mahindra-enters-billion-dollar-league/5164355735