sendmail client in solaris 10 ( relay)

I have setup sendmail e mail client using SMTP server, while sending the mail through mailx i am getting the below error. kindly help.

WARNING: local host name (bkpsrv) is not qualified; see cf/README: WHO AM I?
vishwanathhcl@gmail.com... Connecting to [172.16.96.2] via relay...
220 xyz.co.in Microsoft ESMTP MAIL Service, Version: 5.0.2195.6713 ready at  Mon, 12 Apr 2010 12:06:55 +0530
>>> EHLO bkpsrv
250-xyz.co.in Hello [172.16.98.43]
250-TURN
250-ATRN
250-SIZE 9314304
250-ETRN
250-PIPELINING
250-DSN
250-ENHANCEDSTATUSCODES
250-8bitmime
250-BINARYMIME
250-CHUNKING
250-VRFY
250-X-EXPS GSSAPI NTLM LOGIN
250-X-EXPS=LOGIN
250-AUTH GSSAPI NTLM LOGIN
250-AUTH=LOGIN
250-X-LINK2STATE
250-XEXCH50
250 OK
>>> MAIL From:<root@bkpsrv> SIZE=142
250 2.1.0 root@bkpsrv....Sender OK
>>> RCPT To:<vishwanathhcl@gmail.com>
>>> DATA
550 5.7.1 Unable to relay for vishwanathhcl@gmail.com
554 5.5.2 No valid recipients
>>> RSET
250 2.0.0 Resetting
>>> RSET
250 2.0.0 Resetting
root... Using cached ESMTP connection to [172.16.96.2] via relay...
>>> MAIL From:<> SIZE=1166
250 2.1.0 <>....Sender OK
>>> RCPT To:<root@bkpsrv>
>>> DATA
550 5.7.1 Unable to relay for root@bkpsrv
554 5.5.2 No valid recipients
>>> RSET
250 2.0.0 Resetting
>>> RSET
250 2.0.0 Resetting
postmaster... Using cached ESMTP connection to [172.16.96.2] via relay...
>>> MAIL From:<> SIZE=2190
250 2.1.0 <>....Sender OK
>>> RCPT To:<postmaster@bkpsrv>
>>> DATA
550 5.7.1 Unable to relay for postmaster@bkpsrv
h554 5.5.2 No valid recipients
>>> RSET
250 2.0.0 Resetting
Closing connection to [172.16.96.2]
>>> QUIT
Apr 12 11:51:08 bkpsrv sendmail[16780]: [ID 801593 mail.alert] o3C6L7u1016780: Losing ./qfo3C6L7u1016780: savemail panic
221 2.0.0 xyz.co.in Service closing transmission channel

my sendmail.mc file

divert(0)dnl
VERSIONID(`@(#)sendmail.mc      1.11 (Sun) 06/21/04')
OSTYPE(`solaris8')dnl
DOMAIN(`solaris-generic')dnl
#define(`confFALLBACK_SMARTHOST', `mailhost$?m.$m$.')dnl
dnl MAILER(`local')dnl
dnl MAILER(`smtp')dnl
LOCAL_CONFIG
ESASL_PATH=/usr/local/lib/sasl
define(`SMART_HOST',`xyz.co.in')dnl
dnl define(`confAUTH_MECHANISMS', `EXTERNAL GSSAPI DIGEST-MD5 CRAM-MD5 LOGIN PLAIN NTLM SPA')dnl
dnl FEATURE(`authinfo',`hash /etc/mail/auth/client-info')dnl
dnl define(`confAUTH_OPTIONS', `A')dnl
dnl TRUST_AUTH_MECH(`EXTERNAL GSSAPI DIGEST-MD5 CRAM-MD5 LOGIN PLAIN NTLM')dnl
TRUST_AUTH_MECH(`NTLM GSSAPI DIGEST-MD5')dnl
define(`confAUTH_MECHANISMS', `NTLM GSSAPI DIGEST-MD5')dnl
define(`confDEF_AUTH_INFO', `/etc/mail/auth/auth-info')dnl
APPENDDEF(`confENVDEF', `-DSASL')
APPENDDEF(`conf_sendmail_LIBS', `-lsasl')

---------- Post updated 04-12-10 at 03:29 AM ---------- Previous update was 04-11-10 at 10:47 PM ----------

Can somebody help with this issue.....