Satyam's will look hard at acquisitions before leaping - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  
  • Home
  • Outlook Arena
  • Nov 19, 1999 - Satyam's will look hard at acquisitions before leaping

Satyam's will look hard at acquisitions before leaping

Nov 19, 1999

Satyam Computers will adopt a 'guarded and cautious' approach in making strategic investments in overseas firms. 376, 209, 304, 7685 Since its inception in 1987, Satyam Computers (Satyam) has focussed on software development and infotech (IT) services on mainframes (legacy system). Close to 60% of revenues come from mainframe-related jobs. It has taken a strategic decision to focus on e-commerce and web-enabling tools.

The chairman's statement that it will not rush into making acquisitions seems to highlight the fact that Satyam will employ the acquisition route only if the benefits are evident and not vague. It will invest in companies promoted by venture capital firms to help them translate ideas into products. The company will adopt the outright acquisition route only if there are definite synergies with the target business.

The company will offset the decline in Y2K revenues by undertaking more e-commerce and web-enabled businesses. Satyam will list its stock on NASDAQ next year.

Satyam's look-before-you-leap strategy makes a lot of sense. There are a lot of software startups the world over, and it would be unwise for the company to acquire companies for the sake of acquisitions. That is why the company has decided to target acquisitions on certain criteria, and not indiscriminately.

A lot of Indian software majors have adopted the acquisition route for growth. This could put some pressure on their peers to acquire companies so as not to be left behind. Therefore, it is critical that software companies outline the objectives and criteria before they go in for the kill, else they will be saddled with companies with little synergies with their core business.

Market view:
Satyam's successful foray into products (Vision Compass), combined with the strong performance of its ISP arm (Satyam Infoway) and spurt in onsite revenues have prompted analysts to flag the stock as a 'BUY'.

Equitymaster requests your view! Post a comment on "Satyam's will look hard at acquisitions before leaping". Click here!

  

More Views on News

Why Subex Shares Rallied 32% in the Last Two Sessions? (Company Info)

Apr 22, 2021

Share price of the company witnessed upward rally in the last trading session even as share markets remained volatile.

More Views on News

Most Popular

India: Recovery Stalled by Vaccine Games? (The Honest Truth)

Apr 13, 2021

Ajit Dayal on how India's vaccine strategy will impact the markets.

Top 3 Nifty ETFs to Buy Now (Fast Profits Daily)

Apr 20, 2021

In this video I tell you the three Nifty ETFs I think are the best.

A Stock with 700% Return Potential Comes with Additional Payoffs (Profit Hunter)

Apr 15, 2021

Narayana Murthy was one of the first unicorn founders to get the backing of this entity...

11x Bankruptcy to Bluechip Stock: A Rare India Revival Story (Profit Hunter)

Apr 16, 2021

There is no stopping this 11-bagger stock from significant upside.

Why Did the Market Crash on Monday? (Fast Profits Daily)

Apr 13, 2021

In this video, I'll you what I think is the real reason behind yesterday's market crash.

More

India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms

MAHINDRA SATYAM SHARE PRICE


Jul 3, 2013 (Close)

TRACK MAHINDRA SATYAM

  • Track your investment in MAHINDRA SATYAM with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

MARKET STATS