Having remained long under the shadows of the big 5, Patni set upon 2004-05 with a clear set of action plans-put a verticalization strategy in place, reduce GE dependence, have a more proportional revenue distribution across geographies, rationalize the onsite-offshore mix, and enhance the scope of client relationship by means of new offerings like BPO and IT consulting. A report card on its performance during the year shows, starts were made in all areas identified, though results obtained indicated success in varying measures.

HIGHLIGHTS Businesses other than application development and maintenance services grew 54% Alliances with Milliman and InteQ to expand service offerings Has adequate cash reserves through IPO and ADR to pursue inorganic growth Verticalization for cross-selling and increasing the scope and size of contracts Though reduced during the year, GE dependence at 31% is still high Though BPO and IT consulting expertise have been added, Patni still lacks strategic consulting skills l Start-up Year: 1978 l Products & Services: IT consulting and software development services l Branches: 37 l Address: Akruti, MICO Cross Road No 21, Andheri (E), Mumbai l Tel: 56930205 l Fax: 56930211 l Website: www.patni.com

The most important success was, without doubt, achieved in verticalization-though late in the game, this strategy helped Patni successfully tackle a few other pain areas too. The acquisition of the US-based Cymbal Corporation for $68 mn in an all-cash deal gave Patni a foothold into the growing telecom sector; it brought 14 new telecom clients including blue-chips like SDC, Virgin Mobile, Yahoo, Sprint Canada, 3, Cable & Wireless, AT&T, and Avaya into its fold. With most of these deals already generating more than $1 mn in revenues, Patni managed to add 20 mn-dollar customers to its kitty during the year. Not to mention, the cross-selling opportunities offered by these new additions.

Verticalization also helped Patni reduce its GE dependence-though this 13-year old relation grew to more than $100 mn, the dependence had come down to 31% only. In fact, the contribution of the Top 10 clients came down by 12 points to 64% during the year, even as the business from those outside Top 10 grew by 69%--last year the top 2, GE and State Farm Insurance, by themselves, had accounted for more than 60%. Businesses from Europe and Japan contributed 42% of the total revenues. It expanded its European operations into Amsterdam, Stuttgart, Munich and Scandinavia.

Patni increased its service offerings too-BPO, IT consulting, and infrastructure management were identified as new service lines, especially for the insurance and telecom verticals. The earlier acquisition of Reference helped Patni beef up its insurance expertise. As Patni built up its competency across end-to-end solutions, it also identified key strategic moves necessary to grow individual service lines: some of these included more nearshore operations for telecom, moving into more IT consulting at nearshore centers and create a front-end for embedded systems business in Japan.