Satyam eyes engineering outsourcing deals

BANGALORE (Reuters) - Satyam Computer Services Ltd. is eyeing more outsourcing deals in higher margin engineering designs to offset the impact of a stronger rupee on exports, an official said on Monday.

New York-listed Satyam is negotiating eight deals worth $20 million to $25 million each in engineering, T.S.K. Murthy, head of integrated engineering solutions at the Hyderabad-based firm told reporters.

At least two deals are likely to be finalised before the end of the fiscal year in March 2008, he said. Satyam's key clients include General Electric, Qantas Airways Ltd. and Nestle.

Aerospace and automobile companies are stepping up outsourcing of complex engineering works like designing product components, but it can take up to two years for Indian IT services companies to finalise deals.

The global offshore engineering spend is expected to grow to $150-$225 billion by 2020 and India, with its talent pool and experience in engineering services, could pick up 25 percent of that, the National Association of Software and Service Companies said.

Satyam, India's No. 4 software services exporter, reported a lower-than-expected 7 percent rise in quarterly profit on Friday, as a stronger rupee squeezed its margins.

India's export-driven software firms such as industry leader Tata Consultancy Services and Satyam are increasingly looking at higher margins services to offset the stronger rupee that rose to a nine-year high of 40.23 a dollar on Monday.