If offshoring can claim a mainstream status, the vindication would come from Infosys. Revenues from onsite development came down by 7% in FY 2004-05 to 48% as the company constantly shifted work offshore, citing a win-win scenario: clients win because of reduced cost; Infy wins because offshore is more profitable and allows it to leverage investments in systems and processes. Last year saw some services like package implementation, which is traditionally onsite oriented, being delivered 60% offshore. A topline and bottomline growth that remains significantly higher than the industry average, is thus little surprise.

HIGHLIGHTS Focus on profits along with topline 'Newer' services add 40% to Infy's kitty New consulting model gained acceptance: additional downstream revenues likely Revenue productivity per employee moved in a narrow range Weakening pound and euro, doubling of visa cost can hit profits Has to maintain margins through hectic hiring and rising compensation costs l Start-up Year: 1981 l Products and Services: Consulting, IT services, BPO l Branches: 12 in India; 36 overseas l Address: Plot No. 44, Electronics City, Hosur Road, Bangalore – 560100 l Tel: 28520261 l Fax: 28520362 l Website: www.infosys.com

Infy capitalized on last year's bottomline focus to grow 52% as compared to 30% in FY 2003-04. What's not comforting is the slight drop in per person productivity (22.2 lakh last fiscal) driven by a 38% growth in headcount last year. The company, though, did a good job of maintaining margins-helped by the current environment of stable prices to an extent-in spite of compensation costs going up by 13% in India and by 3% abroad.

At home, Infosys rode on Finacle's success to register a 102% domestic growth. Investments of around $10 mn, which went into enhancing the Finacle product suite, had helped the business scale, a trend that's likely to continue this year, the product having already grown by around 41% from the last quarter.

The brighter spot was Infosys Consulting that generated revenues of Rs 21 crore in its first year and grew 100% in the first quarter of FY 2004-05. Offshoring, again, played an important part in this model for consulting where the total cost of project implementation was brought down by it, helping clients to invest in activities like change management, user training and business process re-engineering amongst others. Newer services like infrastructure management, systems integration, business process management, RFID, package implementation and testing, introduced in the last five years, saw good traction with the segment now contributing 40% of the company's total revenues. Package implementation (approx 15% of revenues) and Testing (6.7% of revenues) stood out as two services that grew rapidly and where infy is also focusing.

Now, what's needed to make Infy's globalization story more complete is good growth in the China business. Something we can talk only next year.