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Deeptha Rajkumar

KOCHI, March 20

SATYAM Computer registered huge volumes on the bourses today even as hostilities against Iraq commenced. Brokers said that with the `fear' having become a reality, the market went into pullback mode and made some recovery.

Satyam Computer ended the day at Rs 205.70, up 5.87 per cent with around 1.02 crore shares traded on the BSE. On the NSE, the stock closed at Rs 205.15, up 5.26 per cent with around 2.57 crore shares traded.

The company reports that the build-up to war has in no way impacted business between Satyam and its US clients. This served as a shot-in-the-arm for the counter. Market sources said that past trends suggest that a slowdown or downturn in the US on any account has helped outsourcing. "Outsourcing is the effective way of managing with smaller budgets. So given the current scenario and in line with company reports there is anticipation that work will flow to India," a broker said.

Beyond the war, Satyam is reportedly looking at maintaining its order flow form TRW Automotive, a $30-35 million a year client. The client company has split into three entities and Satyam would have to deal with each of them separately.

According to market grapevine, the heads of several US software companies visiting India over the last couple of days underlines the US confidence in India and is being viewed as a positive indicator for the industry as such.

However, analysts refuse to toe the line to such logic. "There is no doubt that work will flow to India. But at what cost? This could bring about a fresh bout of rate cuts which will impact the profitability of companies," an analyst with a leading brokerage firm said.

Commenting on the current scenario, the Head of Research at Paresh Khandwala, Mr Gurunath, observed that there will be growth but the cost of growth will be high. "There is no doubt that in comparison to last year, Satyam is better positioned this year in the sense that there are not too many commitments to drain its cash flows. But its performance will be punctuated by upheavals as it is getting hit on the realisation front," he said.

However, there is a perception that with value addition becoming the order of the day, what the company needs to do is to move in tandem with other key market players as far as overseas market strategies are concerned.

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