0		Satyam, not, noteworthy, rival,, but, its, stock, sure, looks, worthy

Satyam Computers was dropped from the list of noteworthy rivals by Infosys. Wipro has followed Infy’s footsteps and dropped Satyam from the rival list.

First thing is, I did not know that companies maintain a rivals list and then publish it. Second thing is, dropping a proven IT service provider from the list is premature. Satyam’s capability as company which can deliver was never in question. The only thing in question were its financial’s.

For competitors the business they make is more important than the financial’s of the company. So, what Wipro and Infosys has done is took the load off Satyam by dropping. Now, Satyam can start fresh in its new journey with Tech Mahindra. It do not have the same kind of expectations which it used to have.

Post Tech Mahindra acquisition Satyam’s stock remained quite for a while. It did not participate in that crazy 2000 points rally. Which made me think that the right price for Satyam is less than 50 rupees. I was wrong.

Satyam’s stock surged in the past few days and its ADR has gained 34% to end at $3.64. It was a penny stock few weeks ago. Reason is the published numbers for Satyam. Though there are doubts about impending liabilities the numbers paint a rosy picture. The company is profitable.

Satyam posted a consolidated net profit of 1.6 billion rupees ($33.5 million) for the December quarter, and profits of 40 million rupees in January and 520 million rupees in February. (Reuters)

For all the speculations in the world the operating profit is not 3% and the Raju brothers has skimmed the money from the company. Which is a good news for the company and especially for Tech Mahindra which took such a big risk.

It is not to say that the worse may be over for Satyam. It might be finding its right price in the market and may be settle somewhere below 100. And the lurking fear of pending law suits is still haunting Tech Mahindra. But, it shouldn’t have been written off like its noteworthy rivals did.