Q&A: Vineet Nayyar & C P Gurnani, Mahindra Satyam

'There could be some budget squeezes in US in short-term'

Mahindra Satyam is optimistic the crisis in the US would not have any adverse impact on it. While announcing the first-quarter numbers on Tuesday, chairman Vineet Nayyar and chief executive C P Gurnani shared with reporters the company’s efforts to strengthen its presence in the US, delisting of American Depository Shares (ADSs) from the New York Stock Exchange (NYSE), etc. Edited excerpts:

Will the dependence on the US reduce?
Gurnani: We still believe that in terms of some of the most successful corporates in the world. The US’ focus on alternate energy, innovation and new technologies will continue to make it the most attractive market. So, we are strengthening our efforts go-to-market. We recently hired a fair number of consultants, sales managers and technical managers, based out of the US, so that we can further strengthen our market reach.

What would be the impact of the present US crisis on the information technology sector?
Gurnani: This is a difficult question to answer. The instant reaction can be like the stock markets reacted. If you look at things on a proper balance, the fundamental fact is the private sector in the US is doing well. And, the private sector is not only dependent on the US market. Many large corporations are also dependent on the global markets. When we did some analytics, it was clear 75 per cent of almost all large firms’ businesses comes from overseas markets. So, we believe whenever there are challenges, they have to relook at their own models. And, some customer-centric models that we have like co-innovation, co-sourcing and global delivery centres, will become even more important. I can’t anticipate exactly what the impact would be. I am a strong optimist and I believe to some extent, it will be to our advantage in the medium-term. There may be some reactions in the short-term and there could be some budget squeezes.

The European debt crisis is also becoming wider. Will you be scaling down your hiring plans?
Gurnani: In the short-term, I cannot immediately say what is going to happen in the market. Our reading says there is obviously an impact that is happening on the economic part. Our feeling is it’s not going to impact global sourcing. It’s not going to impact our strategic relationships with our customers. But if there is any impact, we would have to accordingly adjust our hiring plans.

Will delisting of ADSs impact the NYSE relisting you are planning?
Nayyar: What’s likely to happen is we will withdraw from the NYSE. And, as and when we are ready to relist, we will have to see that our accounts are acceptable by the Securities and Exchange Commission.