Mahindra Satyam is bleeding to show a big loss, but behind the red ink may be a rosier message, as big scars have healed, and money set apart to cushion the blows of the 2008 accounting scandal in Satyam Computer Services that led to a painful makeover.
Now, the company that was once India’s fourth-largest IT service player appears poised to reclaim its place on the larger canvas of Indian software companies.
Rakesh Jain, head of retail research at Religare Securities, said the worst was over for the company and its share price fall was only a hiccup.
“These apprehensions are mere over-cautiousness as memories of the colossal fraud is still afresh in the minds of investors and IT clients,” Jain said.
True, the company has yet not been able to completely exorcise the ghosts of the R8,000-crore accounting fraud that led to a class action suit by US investors.
Minor irritants remain, such as legal suits between Mahindra Satyam and Maytas (the company into which Satyam’s money was allegedly siphoned off) in India and client lawsuits involving Upaid Systems and Aberdeen in the US.
However, analysts say the company has a cash balance of R2,753 crore as on March 31 after making provisions, and can handle any contingency.
Meanwhile, clients are coming back, with brokerage analysts counting around 30 big ones as keeping their faith in Satyam.