Monday, April 13, 2009

Party at Arun's house

Nanda is an Analyst. Neha, Priya, Arun and Ravi are his friends who are assembled at Arun's house for a party. Arun is hosting the party as he failed on a bet with Nanda. Arun was confident of L&T suceeding the bidding process as opposed to Nanda who supported Tech Mahindra.

Nanda: Hey Arun, finally you have to agree that I won the bet with you.
Arun: Yes. I thought L&T was very keen from the beginning.
Neha: I do agree that L&T would have gained more had it won the bidding. How will it affect the IT sector.
Nanda: I think Mahindra is better placed IT firm than Infy, TCS and Wipro. Because of its client base and revenue.
Arun: I disagree with you. Nobody can compete with Infy or TCS.
Ravi: I disagree with you Arun. You know Tech Mahindra is concentrated towards telecom industry and with this acquisition they extend the service to other areas also.
Priya: This is similar to the ripple effect seen in water. If we drop a stone in the pond it creates concentric circles with the place where the stone was dropped as its centre.
Nanda: Right said Priya. I assume Tech Mahindra can now provide other service and can continue to have more focus towards its core sector ie. Telecom.
Neha: Another point to note down is that MBT as it was earlier called has a strong revenue and client base in Europe.
Arun: Yeah. But the issue is that they are more dependent on BT who is the primary customer from UK.
Nanda: I agree. But we know that Indian IT companies are more dependent on America and Satyam is not any different. Now this merged entity will have a balanced outlook in two major geographies America and Europe.
Ravi: This can act as a headache for other major IT players such as Infy, TCS and Wipro who are still struggling to get a major client base in Europe.
Arun: I think the Europe market is conservative when compared to US market. This is the reason for Indian cos. to struggle in acquiring new clients in this region.
Priya: You are right Arun. Me too have read about the conservative nature of Europeans.
Nanda: I am thinking of increasing my exposure in Tech Mahindra. The cos. is having bright future.
Arun: I will wait for another quarter and then will increase my stock.
Priya: I have never purchased Tech Mahindra in the past. I never thought this company will become one of major IT player.
Neha: Me too have no stock in this company. I am going to buy a small lot.
Ravi: I am thinking of buying Satyam instead of Tech Mahindra because the management might try to merge the stock.
Nanda: Good thought Ravi.

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