As scandal rocks Satyam, rivals may pick off clients

By Devidutta Tripathy

NEW DELHI (Reuters) - A $1 billion fraud at Satyam Computer Services may have put the Indian outsourcing firm's future in doubt, but could be a boost in troubled times for local and global rivals if they can lure away worried clients.

Satyam founder and chairman Ramalinga Raju quit on Wednesday after disclosing that profits had been overstated for years, raising questions about the survival of India's fourth-largest software services exporter.

"Satyam is way too risky a deal. Clients will walk. Key employees will walk," analysts at broker First Global wrote.

Local rivals Tata Consultancy Services (TCS) and Infosys Technologies are among those who could pick up defecting Satyam clients.

Among foreign vendors, Accenture and Cognizant, which have large offshore centers and already serve Satyam clients such as Kimberly-Clark and Telstra, would also benefit, analysts said.

Satyam, which specializes in business software and offers back-office outsourcing and consulting, counts General Electric, Nestle, Qantas and Fujitsu among its major customers.

"At this stage, Qantas assesses any risks to business as manageable," the Australian airline said, adding it would monitor the situation daily.

Satyam has appointed an interim CEO and a team to help him run the company, and a senior company official told Reuters that customers were being told it was "business as usual."