Sitting on a cash pile of Rs 3,311 crore, Mahindra Satyam is looking at acquisitions in the European Union and Australia in the areas of engineering services, manufacturing and healthcare verticals.

“The size of the deals is not an issue. We are looking at the right product,” C.P. Gurnani, Chief Executive Officer of Mahindra Satyam, said.

Addressing a press conference here on Thursday to announce the third quarter results, he said the North American market showed a decline quarter on quarter, while Europe showed a growth. “This is not an indication to rebound of Europe. The US customers had shut down for two weeks in December. It is a kind of holiday there,” he said.

The US contributed 53 per cent of Rs 1,940 crore revenues of the company in the quarter as against Rs 1,718 crore in the same quarter last year. This was followed by the EU with 24 per cent. and the rest of the world 23 per cent. The company added 169 staff in the quarter to take the total to 37,000. The attrition rate was put at 13 per cent.

“We will continue with the mix of 54:24:22 (US, EU, rest of the world). There is a pent up demand in the US for engineering services and mobility solutions,” he said.

Informal merger

As Mahindras await the Andhra Pradesh High Court for the merger, Mahindra Satyam and Tech Mahindra have begun to work together. Its Chairman Vineet Nayyar said the merger was at the penultimate stage.

“It will happen in the near future. But de facto we are working together. We have made good progress in system consolidation, process alignment and the joint go-to-market strategies,” he said. Its net profit for the quarter fell by 74 per cent to Rs 80 crore from Rs 308 crore. The company attributed the dip to the payouts made to settle the Aberdeen case in the UK in the quarter.

Gurnani said there was no pressure on billing but admitted that it reached a plateau. “Any growth happening (on billing) is happening because of the value edition,” he said.

On his comment at Davos that the company was being punished for reviving a sick company, he said the company did represent to the government on the issues but didn’t get the answers.

(This article was published on January 31, 2013)
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