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Mahindra IT business posts growth despite challenges to BPO industry

Veronica C. Silva | Aug. 26, 2011
Investments in US and emerging economies are bringing results for the IT company of conglomerate Mahindra Group.

India's Mahindra Satyam posted growth in its first quarter ending 30 June with consolidated revenues reaching US$320 million, representing a 5.2 per cent increase from the last quarter. Compared to the same period last year, this represents a 19.3 per cent increase.

The global IT services arm of the Mahindra Group said its customer-centric strategy has helped it grow the business as the company progresses in what its chairman Vineet Nayyar referred to as a ''three-year transformational journey''.

The company also attributed its growth to its investments in the US, where it has several offices, and   traction gained in emerging economies, including parts of Asia.

But Nayyar did warn of challenges ahead, particularly in the outsourcing industry in which analysts consider Mahindra Satyam to be one of the major global players.

"Our relentless focus on market growth and margin expansion has yielded satisfactory results for yet another quarter,'' said Nayyar. ''We are reasonably confident that we will capitalise on this momentum. However, turbulent macro-economic conditions can pose challenges to the business environment for the outsourcing industry".

Customer focus

C.P. Gurnani, CEO, Mahindra Satyam, said the company's focus on customers - by offering them innovative and comprehensive solutions - allows the company to grow; growth experienced from the last fiscal year.

Industry analyst IDC said in a report IDC Insight dated August 2011 that the company's ''customer centricity'' focus has been successful in winning back customers lost after the company predecessor - Satyam Computer Services - figured in an accounting scandal in 2008. IDC also noted Mahindra Satyam's focus on customer satisfaction.

Mahindra Satyam is the rebranded Satyam Computer Services after the latter entity was acquired by Tech Mahindra, which is a tie-up between the Mahindra Group and BT. Mahindra Satyam and Tech Mahindra are planning to merge eventually.

Gurnani said it is counting on its ''M-Cube initiative'' to propel the company to further growth.

The M-Cube initiative seeks to leverage on the strengths of the Mahindra eco-system to co-create and co-source solutions for the market.

Aside from information technology, the Mahindra Group has interests in a wide range of industries, including automotive products, aviation, components, farm equipment, financial services, hospitality, logistics, real estate and retail.

Mahindra merger   

IDC, in the same report, said ''The M-Cube initiative has the potential to launch Mahindra Satyam and Tech Mahindra into the next tier of growth and as such is the most important strategic option being explored by the senior management.''

One of Mahindra Satyam's highlights for the quarter was its decision to join the GENIVI Alliance, an automotive and consumer electronics industry association which drives the development and adoption of an open In-vehicle Infotainment (IVI) reference platform.


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