Mahindra Group’s bold gambit to acquire the fraud-mauled Satyam is set for a corporate climax in the form of a merger with house firm Tech Mahindra. It plans to build a $2-billion software behemoth that would catapult it into the industry’s big league, even as it reported a 10-fold increase in net profits for the second quarter ending September.
On Thursday, Mahindra Satyam reported a 10-fold increase in its net profit at Rs 238 crore on a revenue of Rs 1,578 crore — a 27% jump against last year’s sales.
“We had executed a plan that involved a strategy of breaking down the company’s operations into three parts — governance, customers and people challenges,” Gurnani said.
Milestones for a three-year transformation were clearly articulated across all the three broad groups and with a common strategy to bind them together, Gurnani said. In April 2009, Mahindra group acquired Satyam Computer Services Ltd three months after its founder and chairman Ramalinga Raju’s stunning confessions that the company’s books were doctored for several years unravelling a Rs 8,000 crore accounting fraud.
Gurnani said the working groups for the merger process have been formed.
“If all goes to plan, the merger process should be complete towards the end of the next year,” Gurnani said.
The company has shown significant improvement through various quarters despite an uncertain macro-economic environment
Kiran Karnik, technology sector veteran and former president of National Association of Software Service Companies (Nasscom), who was among the three independent directors the government had inducted to oversee the sell-off after the scam broke out, said he was “delighted” to see the turnaround.
“The past is gone. The ship is now back on course and gathering momentum,” Karnik said.
“As we come towards the end of our three-year transformation journey, it is satisfying to see that all our key business performance indicators such as growth, profitability and talent retention are on course,” said Vineet Nayyar, chairman Mahindra Satyam.