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is the company that took one of its subsidiaries, Satyam Infoway, to Nasdaq,

thus making it the second Indian company to be listed on the hi-tech

international exchange. It also set a trend of tapping the US bourses even

before trying its luck at the domestic market. However, on the branding count,

Satyam failed to impress.


By starting subsidiaries in different

regions and amalgamating other companies, Satyam tried to be a global player

with a local flavor. Its avowed aim was to move into the digital era with a

single entity and a single brand. But its subsidiaries, including the ones that

it formed in the last

fiscal–Satyam Japan in Japan and Satyam Asia in Singapore–were not able to

create the much valued branding it needed to become a global competitor.

Satyam’s turnover grew by 79%–to

touch Rs 677 crore. Exports contributed Rs 663 crore–98% of the revenue. Its

net profit also went up by 85% to cross the Rs 100-crore mark, reaching Rs 135



  • To move into the digital era with ‘one

    entity one brand’ towards global pre-eminence
  • Has got clearance for Rs 1,700-crore ADR issue

    for acquisitions.


  • Net profit grew 85%, and total revenue 79%
  • Split stocks five-for-one
  • Operating margin dipped to 37% from 39%
  • Set up two subsidiaries in Japan and


However, the company failed to improve

upon its operating profit margin, which came down to 37% in the last fiscal as

compared to 39% in 1998-99. For the January-March quarter of 1999-00, it was

35%, down from 40% in the corresponding period in 1998-99.

Satyam’s off-site development centers

too were not able to generate substantial revenue, and, coupled with the rise in

the marketing expenses, were responsible for the dip in Satyam’s profit

margin. Incidentally, only 21% of its revenue from exports was realized through

on-site projects, with the bulk 74% coming from offshore development.

Satyam’s technological mix of

businesses shifted a great deal from that in 1998-99. The company

  • START-UP YEAR: 1987
  • PRODUCTS & SERVICES: Software export
  • ADDRESS: Mayfair Center, SP Road, Secunderabad 500 003
  • TEL: 784 3222
  • FAX: 784 0058

was able to bring down the level of

Y2K-related work to 5% of the total revenue, as compared to 28% in the previous

year. On the other hand, specialized services were able to make a headway with

ERP solutions from SAP and Oracle contributing 10%, telecom and digital

communications 11%, internet and ecommerce projects 17%, and engineering

services 6%. The company was able to do well in consulting and systems

integration with the total solutions business making up 25% of its revenue.

To strengthen its presence in the

enterprise application portfolio, Satyam forged partnerships with Siebel and i2

Technologies, besides the existing ones with SAP and Oracle. Looking at the

revenue mix, telecom was another domain where the company was able to strengthen

its presence. And the investments that it made in embedded systems, ecommerce,

mobile internet applications and call centers started yielding results too.

As with other software export majors,

the US was Satyam’s strong ground. It raked in 77% of its revenue from this

region, while Japan, on the strength of a newly-formed subsidiary, made up 9% of

the revenue. Europe and the rest of the world, contributed 7% each. On the

domestic front, Satyam increased its revenue to Rs 14 crore in the last fiscal

from Rs 1.5 crore in the previous year. Satyam also went in for a five-for-one

stock split in the last fiscal.

It was also a year of consolidation for Satyam. It was

able to retain most of its customers as well as rope in new customers like Cable

& Wireless, Emirates Airlines and, among others. It also entered

into a 50:50 joint venture with Venture Industries Global Engineering LLC to set

up Satyam Venture Engineering Services, for offering CAD/CAM solutions to the

automotive industry worldwide. But if the company has to keep pace with the

competition in the global arena, it needs to immediately address its branding

problem. DQ