MUMBAI (WSJ) -- Satyam Computer Services Ltd., once India’s fourth largest software exporter, will focus on regaining its lost market share and rebuilding its brand while maintaining a close eye on profitability, its newly appointed chief executive said.

C.P. Gurnani took over in June as part of the management changes introduced by the new owner Tech Mahindra Ltd., which bought the fraud-hit company for over 29 billion rupees ($593 million) in April and has since renamed it Mahindra Satyam.
“Customers are expressing relief that the uncertainty is over client confidence is showing signs of a complete recovery,” Mr. Gurnani told Dow Jones Newswires in an e-mailed interview. Tech Mahindra now owns 42.7% in the company.
Many clients had barred the Hyderabad-based from bidding for contracts after it was hit by an accounting scandal in January, when the founder and then-chairman B. Ramalinga Raju revealed he had overstated the company’s profits over several years and created a fictitious cash balance of more than $1 billion.
“Embargoes have been lifted and we are being invited to bid,” he said, adding that while bidding for large deals the company plans to give customers an upfront payment equivalent to the amount they would save by giving it the order, a tactic followed by Tech Mahindra.
The Indian government has also waived off a pre-condition - that companies must submit audited financial statements for the last three years to bid for outsourcing projects from the government or state-run companies - for Mahindra Satyam, Mr. Gurnani said. Mahindra Satyam is now in the process of restating its results for the last six years.
“We’ve retained a large majority of our clients, and our priority is to regain as many of those we have lost as is possible,” Mr. Gurnani said, without elaborating on the number of clients the company now has or how many it lost.
Earlier in June, the company said 24 clients withdrew a part of their purchase orders between Jan. 7 and March 26. Nineteen more clients withdrew their orders completely, while contracts with 23 clients expired.
The company had said in October that it has close to 650 clients, including several Fortune 500 companies such as General Electric Co., General Motors Corp., Nissan Motor Co., Applied Materials Inc. and Citigroup Inc.
The company, which lost clients such as U.S.’s State Farm Insurance and the World Bank because of the scandal, has been hit not only by its internal woes, but also by the global economic meltdown.
The company expects demand to remain flat for a few more quarters as “decision cycles have lengthened, although there are indications that customers are now seeing some stability after a period of volatility and uncertainty,” Mr. Gurnani said.
Like other Indian software companies, Mahindra Satyam earns a majority of its revenue from exports to the U.S. and Europe where clients have cut down spending on technology to reduce costs.
This has resulted in muted revenue and profit growth for Indian companies in recent quarters due to a slowdown in demand and falling billing rates.
“We remain very competitive (on billing rates), especially against larger peers,” he said.
“Clearly, there is a need to maintain focus on the bottom line and there is definite scope to do. We are confident that our plans to increase revenues and control costs will help in achieving this goal,” said Mr. Gurnani.
Mr. Raju said revenue for the July-September 2008 period was 21.12 billion rupees - rather than the 27 billion rupees the company had reported - and that operating profit was 610 million rupees, not 6.49 billion rupees, with operating margin at 3% as against the reported 24%.
The company has said it is planning to control costs by cutting down on operational expenses, rationalizing the use of infrastructure and redistributing work among employees to increase productivity.
The company, which earlier said it has about 10,000 excess staff, has already cut the salaries of 7,500 employees and encouraged them to go on long leave.
Mr. Gurnani said while a single integrated company will create “greater value,” there is no timeframe for the planned merger of Mahindra Satyam and Tech Mahindra.
“We are effecting a virtual integration, putting into place a new organizational design that allows for effective and efficient cross-access between the entities,” Mr. Gurnani said.