Syntel: Deutsche Bank stumble?
By Bala Shah

Over the last ten months, Techgoss had published a series of exclusive reports giving details of all that was happening inside the BPO, KPO and IT divisions of one of India’s most successful IT-ITES companies Syntel.  One report showed how that in the recent past Syntel BPO was overly reliant on couple of key clients. Also, reported were the exits of the CEO and key HR people.

Quite often, we in the media are rightly accused of not highlighting the many successes of companies like Syntel and only concentrating on stumbles and hiccups.  On Aug 2, 2010, a market savvy Techgoss reader wrote in to our website highlighting the many successes of Syntel run by the dynamic Bharat Desai.

“
If Syntel is potentially to be taken over by IBM then why these biggies of Syntel are selling their stocks?

Syntel Inc. has a market cap of $1.73 billion; its shares were traded at around $41.71 with a P/E ratio of 14.6 and P/S ratio of 4.1. The dividend yield of Syntel Inc. stocks is 0.6%. Syntel Inc. had an annual average earning growth of 15.6% over the past 10 years. GuruFocus rated Syntel Inc. the business predictability rank of 2-star.
“

On Aug 5, a Tipster who works in a bank at Bangalore sent in this interesting story that illustrates the fact that while Syntel has many smooth running processes,  some stumble in the early stages.  Our Bangalore Tipster tells us

“
A Syntel Process called Allegro, which is currently in the process of migration from Deutsche Bank, Bangalore, has run into choppy waters.

Syntel had sent a team of 30 – 40 employees in June to Bangalore to learn about and migrate Allegro from Deutsche Bank, Bangalore to Pune.  The migration was planned to be spread over two batches – first going over in June and the second Syntel team to leave in the month of August.

According to the grapevine, Syntel has hired many new employees as Allegro would require a support team of 200-250 full timers.  Syntel asked each employee to sign a 1 year employment bond.

Unfortunately, Syntel sent over many freshers because of which the migration seems to have run into problems.  According to sources in the Bank, there is no sign that the second batch will be coming in the month of August.

It seems Deutsche Bank will now evaluate the performance of the first batch before deciding on the best course of action to move forward.
“

According to Syntel insiders, the current crisis stems from the attrition earlier this year and also the fact that the company recruited inexperienced staff.  The general consensus seems to be is that Syntel should do all it can to retain its experienced senior staff.

(Tipsters, Big thank you for all your tips and photos. If you need to speak to us in confidence or write for us, email us at techgoss[at]hotmail.com. Or use the Anonymous Tip form at the top of our website. Anonymity guaranteed. We pay Rs. 700 – Rs. 1000 for 100 – 200 word snippets. Unfortunately, we cannot use any tips which are not backed up by enough facts)