Satyam to set up campus in Chennai

Satyam Computer Services Limited will be setting up a 50-acre campus in Chennai, involving an investment of around Rs 50 crore in the first phase.

As on date, Satyam has campuses in Hyderabad, Bangalore and Bhubaneshwar. It has acquired land in Visakhapatnam for the same purpose.

Speaking to Business Standard, V Srinivas, chief financial officer, Satyam Computer Services Limited, said, "We are setting up a campus in Chennai to meet our organic growth needs. We have already acquired 50 acres of land and will be spending around Rs 50 crore in the next two years."

Satyam has seven facilities in Chennai in an area of 4,19,233 sqft. The company has an employee base of 3,258 in the city with a capacity of 4,195.

The company had so far spent more than Rs 1,000 crore on organic growth and around $50 million on inorganic growth, Srinivas said.

"Of the $600 million cash reserves that we have, around $55 million has been outlined for organic growth this year, of which around $35 million has already been spent," he added.

Satyam will be expanding in Hyderabad, Pune and Bangalore and will set up a new facility in Kolkata. It is also looking at setting up a campus in Nagpur.

"Our Nagpur operations may take some time to start as the land has not been handed over to us as yet," he added.

While the company will be increasing its expenditure in infrastructure, it will be working towards reducing its expenses in selling, and general and administrative (SGA) areas. "There is a lot of virtual delivery of services now and we have strategically reduced our travel expenses too," Srinivas said.

With regard to its service offerings, Satyam is now looking at focusing more on its consulting services as compared to software development and maintenance services.

"Margins are higher in consulting services," he said. For Q306, software development and maintenance contributed to 50.09 per cent of its export revenue as compared to 53.55 per cent in Q3 2005. Consulting and enterprise business solutions' contribution increased to 39.44 per cent in Q3 2006, as compared to 35.3 per cent in Q3 2005.