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8/29/2003
02:18 PM
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Indian Services Firms Bounce Back Quickly After Bombings

The Aug. 25 attacks in Mumbai don't appear to have had any long-term effects on the companies or their stock prices.

The Aug. 25 bombings in Mumbai appear to have had no lingering affects on the big IT services firms in India. Following the twin bombings, which Indian officials believe are the work of Muslim militants, stocks at Infosys, Satyam, and Wipro immediately fell several percentage points and India's BSE Sensex stock index lost 3% that day. But by the close of business on Aug. 28, stock prices for the three IT vendors had bounced back and the BSE Sensex closed at 4212.17, higher than it was the business day before the bombings.

Executives at Satyam and Wipro say the temporary dip was an immediate and emotional reaction to the bombings--and that their customers don't appear overly concerned about the attack. "People are used to living in a dangerous world," says Vivek Paul, Wipro's vice chairman and president. "No commercial enterprise was targeted [by terrorists]. As a result, there's not much questioning on this topic."

But in general, with the rise in terrorism worldwide and other potential security threats, customers have inquired more frequently about Wipro's business-continuity efforts in recent months, Paul says. "We've had customers do audits at our sties and those audits have all ended satisfactorily, with customers feeling that our preparedness was at least as good as their own," he says. Wipro has several back-up centers throughout India and can move developers if one of the centers is affected by a disaster. Paul says it's difficult to imagine a disaster of a magnitude that would disable them all. "It would take a lot to slice off the entire south of India and throw it into the sea," he says.

Satyam has invested heavily in business-continuity efforts, says senior VP Neeraj Nityanand, noting that the company has full development centers outside India in Kuala Lumpar and Singapore that can serve as backups. Satyam also runs its own telephone and power systems.

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