Mahindra Satyam turns growth focus on Europe

Outsourcing titan looks to get creative on pricing after stellar Q1 numbers

Outsourcer Mahindra Satyam is looking to aggressively build up its European footprint over the coming months after posting an upbeat set of first-quarter numbers.

For the three months to the end of June, sales rose 19.3 per cent year on year to $320m (£197m), while EBITDA stood at $46.9m - 14.6 per cent of revenue. This is up from 13 per cent in the preceding quarter. Vikram Nair, head of Europe for the IT services giant, told ChannelWeb his firm will gun for further increases to revenue and profit over the rest of the year.

"All the levers are going in the right direction," he said. "We have the cost structure to go for higher growth. If we focus on growth, the margin will take care of itself.

"We are getting invited for all the large transformational deals. Once we are getting invited, we have the global capability to deliver their needs, which was not the case last year."

Nair claimed Mahindra Satyam is growing by winning deals from both US and European players, as well as the other big Indian outsourcers. The private sector and enterprise markets are providing the biggest growth engine, he added, with the need for mobility a key driver for spending.

"Especially in the UK, [the public sector] still has doubts about how they want to go about their IT restructuring," he explained.

The firm continues to plot robust growth in Europe, claimed Nair (pictured), and will look to ramp up recruitment activities for its consultancy operations. When asked if Mahindra Satyam would look to gain traction with naked aggression on price, he asserted that it was more a case of developing inventively structured tenders.

"The question is: how do we structure the price? We are moving away from day rates to outcome-based pricing," explained Nair." "I would say we will be aggressive with our commercial plans.

"We will also be increasing our European footprint and opening up another test facility [in western Europe]. We are [currently] looking at places. We are looking for acquisitions across the [globe] and Europe is certainly one area where the growth focus is quite high."