Introduction

On September 29, 2010, Mahindra Satyam (the new branding of Satyam) provided restated financial results of the company for the two financial years ending March 2009 (FY09) and March 2010 (FY10). The much awaited results brought to rest months of uncertainty and speculation on the actual financial and operational health of the scandal-ridden company.

This 18-page complimentary Breaking Viewpoint report provides Everest’s assessment of Mahindra Satyam’s financial health, foundations for growth, and strategic direction based on an analysis of the restated financials, interactions with senior leaders of the company and key clients, and insights from our buyer advisory experience. This report also analyzes the implications of Mahindra Satyam’s merger with Tech Mahindra on the global sourcing marketplace.

Key themes examined in the Breaking Viewpoint include:

• The restated financials and their implications on Mahindra Satyam’s relative standing and positioning among the top Indian IT majors
• Market success indicators reflected by new logos and client retention and expansion activity
• Differentiated foundations for growth of Mahindra Satyam
• The vision for the new company and future strategic direction
• Implications for the global sourcing marketplace

Content

Key findings in this report, among others, are:

• While reported stand-alone financials are expectedly weak, the combined Mahindra Satyam-Tech Mahindra entity justifies positioning among Tier-1 Indian IT companies.
• Though engagement renewals and new client wins are encouraging, buyers remain hesitant in inviting Mahindra Satyam to new sourcing initiatives. Restatement of financials and a better understanding of the company’s capabilities will improve Mahindra Satyam’s participation in RFPs, especially in the areas that are foundations for growth.
• To recapture a growth trajectory, Mahindra Satyam will best be able to differentiate itself using four foundations for growth, derived from strong capabilities carried forward from legacy Satyam and synergies with the Mahindra Group’s manufacturing heritage and Tech Mahindra’s telecom expertise.
• The impending integration of Mahindra Satyam and Tech Mahindra is being actively architected with the aspiration of creating a leader in the ICT market.
• Mahindra Satyam’s recovery and integration with Tech Mahindra highlights important implications for the global sourcing marketplace, including an intensification of competition in the supplier landscape, and the emerging need for robust risk management in global sourcing.