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September 22, 2009

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Mahindra Satyam expects IT bonanza

MAHINDRA Satyam, whose business was hit by a financial scandal in January, expects revenue from its Chinese operations to recover next year on increased business from existing clients and the addition of new customers, the company said yesterday.

The fourth-biggest India information technology service firm attributes the expected rebound to a boom in IT spending by local manufacturing and auto industries, said Raghavendra Tripathi, North Asia head of the company.

"It's a tough time, and we have faced significant losses of new client business," Tripathi told Shanghai Daily in the company's Shanghai office.

The company's Chinese revenue will drop by up to 40 percent in 2009 before recovering to 2008 levels next year, according to Tripathi.

Satyam Computer founder Ramalinga Raju earlier this year confessed to a US$1 billion fraud that inflated the company's profits over several years.

In April, Indian telecommunications firm Tech Mahindra, which is owned by India's Mahindra & Mahindra Ltd and BT Group Plc, bought a controlling stake in Satyam Computer and re-branded the company as Mahindra Satyam.

Mahindra Satyam has added 32 new clients in China since May and most of the contracts are for three to five years, the firm said. "We have seen the demand, especially from the local firms, recover here," said Tripathi.

More than 70 percent of Mahindra Satyam's on-site outsouring services in China come from domestic or joint venture firms, mainly in auto and manufacturing sectors.

Mahindra Satyam China now employs more than 500 people in Shanghai and Nanjing. That staffing level won't change in near future, the company said.



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