Born-again (now) Mahindra Satyam (MSat) seems to be moving in the right direction, at least in Rupee terms. Headline revenues for Q3 (to 31st Dec. 2011) rose by 34% yoy to Rs17.2b, 9% higher qoq. However, when translated to USD, revenues actually declined 2% qoq to $325m. Operating margins were over a point higher than the prior quarter, at 13.9%, but we have to assume that the c.10% depreciation of the Rupee over the quarter more than accounted for the improvement. CEO CP Gurnani reflected on MSat’s ‘healthy progress’ in operational efficiencies, though that doesn’t appear obvious from the few numbers they now disclose.
Meanwhile, it’s now just over three years since the Raju scandal broke (see here), and MSat is still dealing with the consequences, both in terms of the Indian authorities and with disgruntled investors. These must be really unhelpful distractions for MSat management in these difficult times, but there seems to be no sign that they will be resolved any time soon.
Mumbai-headquartered Hexaware exited 2011 a quite different – and far more confident – company than it was at the end of 2010. Its formidable 33% growth last year brought headline revenues to $308m. Operating margins were also truly transformed – up nearly 10 points to 16.5%, now at the low end of ‘Tier 1’ players. Even more significant was management’s guidance for 2012 – CEO PR Chandrasekar is looking for at least 20% headline growth, more than double that expected for the India-based offshore services industry. And despite the economic woes in Europe, Hexaware continued to increase its presence, now representimg 28% of revenues (2010: 27%). Indeed the recent $250m deal on our shores (see 
India-based BPO pure play Firstsource took another hit on margins in Q311 on its quest to fuel revenue growth. In the three months to 31 December, the EBIT margin more than halved to 3.5% vs. 9.3% the previous year, and was down from 4.4% the previous quarter. Revenue meanwhile was up 3.3% in constant currency (ccy) to Rs5.77bn (£74.1m), and up 1% qoq (ccy). This is now the third consecutive quarter that Firstsource’s margins have slumped (see 