Business Today

What to look for in Mahindra Satyam results

After 21 months, Mahindra Satyam will restate its financial numbers and announce audited results for FY09 and FY10. A quick checklist of what to keep in mind while looking at the numbers.

twitter-logo E Kumar Sharma   New Delhi     Last Updated: September 29, 2010  | 08:54 IST

After a long gap of 21 months Mahindra Satyam (the new avatar of Satyam Computer) is to restate its financial numbers and announce its audited results for FY 2009 & FY 2010 on Wednesday.

"While this may be a source of relief that the restated financial numbers are finally getting declared, there are still concerns on how the company will allay fears of customers on the completeness of the information shared if the numbers are not be US SEC compliant,'' says Sudin Apte, principal analyst at Forrester Research and one who has been tracking the company and the sector.

Here are some obvious concerns or a quick checklist that BT readers may want to keep in mind while looking at the numbers on Wednesday:

The numbers: What the numbers look like and where they would place the company in Indian IT industry's new pecking order? If it is at around $1.2 billion to $1.4 billion, as most analyst expect it to be, then obviously it is no more among the top five companies and it may be worthwhile in the light of this to view some of the other concerns listed below.

Plans to delist on the NYSE: What they say as the key reason for apparently its plans to delist its ADRs from the New York Stock Exchange and therefore more importantly will this mean there will be limited pieces of information that will be shared as the company in case the company does not file the numbers with the US SEC. The implication of this. For, if the results are not going to be SEC-compliant, then how do they plan to allay the concerns of global customers that the extent and nature of disclosures as need not be on par with what is expected of most American companies?

Investment plans: Since the company has almost lost a year in just stabilising its business it obviously has some catching up to do on making investments to build its future capabilities (say for instance investing more into areas like IP-based solutions, platforms-Cloud, SaaS, for example and other areas that the competition is doing).

Client and employee retention: What numbers does it have to share to convey the success it has had in retaining clients and employees?

Impact on the merger: Do the restated networth and new numbers make merger with Tech Mahindra easier?  What will be the implication of the restated numbers on the merger ratio for instance?

Earlier this year, one year after the Satyam scandal rocked corporate India, C P Gurnani, the CEO of Mahindra Satyam told BT: "This is a two-year transformation programme'' and one that "three components: Getting the operating matrix (customer satisfaction and financial parameters) in line with the best in the industry, redefining and repositioning the company, and finally, meeting or exceeding growth targets. But clearly, the going will not be easy and it could be a longer haul than anticipated. How they have done on these results tomorrow will tell.

  • Print

A    A   A