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Bharat Kumar

Chennai , Dec. 25

IN the last four years, the top few Indian software companies have done much better than their smaller cousins. Those that have been cautious and acquired companies much smaller have also done well.

And, focus on software products could pay off in the long run. A comparison of software company rankings, based on export revenues, between 1998-1999 and 2002-2003 leads to these three conclusions.

The average export revenue for the top 20 between these two years went up from close to Rs 320 crore to about Rs 1,037 crore. The median revenue has also gone up from Rs 220.36 crore to about Rs 423 crore.

Median revenue indicates that point above and below which there are an equal number of companies.

Since the average revenue has grown much faster than the median revenue, it is clear that the top few companies have done better than the smaller ones.

The percentage growth of export revenues is higher for the top companies, even though they grew on a larger revenue base.

TCS, Wipro Technologies and Infosys have remained in the top five.

While TCS is the only company that has held on to its ranking - number one -

Wipro slid one rung to number three.

Infosys muscled its way up two places to second place. Satyam Computer Services has climbed up two places to number four.

After years of media speculation and expectation, Infosys recently announced the acquisition of Australian firm, Expert Information Services, whose revenues touched $35 million.

Infosys has said that its revenues are projected to touch $1 billion in the year ending March 2004, which means that Expert's revenues form just one-thirtieth of its projected revenues.

Wipro Technologies too has acquired companies much smaller than itself, as has iGate Global Solutions (formerly Mascot Systems), a new entrant in the rankings.

Wipro's acquisitions include Spectramind, NerveWire and the energy sector services arm of US-based American Management Services. iGate's acquisitions include eJiva, IT&T and IdeaSpace.

On the other hand, Silverline Technologies, which made it to the earlier rankings at number 20, does not figure in the recent list.

It had acquired SeraNova, another software company. At the time, SeraNova was roughly half the size of Silverline.

Among the new entries in the latest list, Polaris Software Labs this year completed the acquisition of Orbitech Solutions from the Citigroup stable, the revenue of which is similar to that of Polaris.

Industry watchers say that it is too early to predict the result of integrating the two companies. i-flex Solutions, formerly Citicorp Information Technology Industries Ltd, focuses on developing software products rather than on developing software that a customer commissions. It has jumped from rank 17 to 10.

Other than Silverline, companies that are no more in the top 20 include Pentafour Software and Exports and DSQ Software. (Pentafour's division that worked on software other than for animation, later spun off as Pentasoft Technologies, makes it to the list, though.)

It may be recalled that Mr Ketan Parekh, the broker who was recently barred from trading in the stock markets for 14 years, had shown an interest in the stocks of these three companies.

L&T Infotech and IMRGlobal also don't figure in the latest ranking.

Another interesting change is that global majors such as Cognizant Technology Solutions and IBM have not been included on revenue ranking while in the 1998-1999 ranking, they held positions seven and eight respectively.

A spokesperson for Cognizant said, "Nasscom has begun to use a different yardstick for ranking companies. It now does not include companies headquartered outside India."

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