Mahindra Satyam revenue may drop this year

Satyam Computer Services Ltd (rebranded as Mahindra Satyam to reflect its new ownership), which announced its restated and audited accounts for the 2009 and 2010 financial years, is likely to witness a much lower revenue run-rate in the current financial year, according to a top official of the company.

Mahindra Satyam said yesterday that some of the clients who had decided to leave during the period of trouble were in the process of closing their contracts. "We expect our FY11 revenues to be lower than the previous year as the lost clients wanted to complete the projects on fast-track before signing off. Those clients will no longer contribute to our top line this fiscal," the official, requesting anonymity, told Business Standard.

The company had reported an Ebitda (earnings before interest, taxes, depreciation and amortisation) margin of 8.3 per cent in 2009-10, as compared with 3.4 per cent in 2008-09. Earlier with about 500 clients, it now has about 350 active ones. Between April 13, 2009, the day of acquisition by Tech Mahindra to March 31, 2010, it added 44 new ones.

"The run rate will be much lower and it cannot be the same in FY11 because of the gradual downfall which happened in 2010. But it is a firm and a clear path for recovery," said CP Gurnani, chief executive officer of Mahindra Satyam.

Stating that between December 16, 2009 and January 7, 2010, the company had lost 198 accounts, he said the management team and the employees were committed to leverage its practices around business intelligence, analytics and business enterprise solutions and spring back on to a growth trajectory.

“Our results are holding us back because many of our lost accounts have stated that the people who have walked away love the customer delivery, they love the customer centricity and that they love the technology and innovation. The growth will be gradual but will definitely be firm. In our three-year transformation journey, the first year will be about stability and the second and third year will be all about recovery of lost accounts and discovery of some of the lost markets. My focus for the next 18 months is going to be on growth," Gurnani said.

The company said the new clients added during 2009-10 were from North America, Europe and Asia-Pacific. The new additions were from sectors such as banking and financial services, manufacturing and healthcare.