Even if that may be the case, however, KPIT Systems, the latest software scrip to list on any of the bourses, is now trading close to Infosys and NIIT price-earning multiples. In fact, the company has left Satyam Computers a way behind in terms of PE. While KPIT currently enjoys a PE of 63 (based on the 1998 EPS of Rs 5.15), IT bigwigs like Infosys, NIIT and Satyam Computers have a PE of 72.9, 77.9 and 51, respectively. Last Tuesday, when KPIT was listed on the Pune Stock Exchange, it went up to a day's high of Rs 400 (P/E 77.7).

``Given the company's low floating stock and the initial euphoria this can be justified,'' says one IT analyst. ``As the company's IPO was oversubscribed more than 40 times the initial offering, those whowere left out wanted a share of the pie and a few wanted an exit opportunity. The supply-demand mis-match resulted into the scrip commanding such a high premium on listing,'' he added.

However, now that the initial euphoria is over, the scrip has come down to Rs 325-level, a P/E of around 63.

Still the discounting is much higher than what its peers in the small and medium sized software segment enjoy. For example, Sonata Software, at Rs 319 on BSE, currently enjoys a P/E of 38.2.

Currently, KPIT Systems is on a strong growth path, with major emphasis on its overseas operations. The company already has a subsidiary in UK which is one-and-half year old and opened its US subsidiary in August 1998. The US subsidiary was opened with the expressed objective of establishing a direct marketing base in the country. Recently, it has also opened its middle-east subsidiary.

At present, its overseas operations account for around 95 per cent of its total income. And to protect the company form any unforeseenchanges in any country-specific business environment, its overseas operations are spread-out to different geographical locations around the globe.

On the product front also, KPIT has diversified well over the years. Currently, the two main growth areas of the company are re-engineering & migration technology and data warehousing & enterprise resource planning.

According to a software analyst, both of these services have immense growth prospects. ``As the newer softwares and hardwares come into the market, the existing users need to upgrade and/or change to new technologies, with the growth of software applications, this remains a perpetual growth area,'' says the analyst. An international banking group is one of its major customers of this division of the company.

During the year to June 1998, Y2K related services accounted for 25 per cent of its total revenue. Though the company provides Y2K solutions to its clients, it does not provide that through any separate focus group. Rather the millenniumsolutions are a part of the company's re-engineering & migration services.

On the ERP front also KPIT is moving in the right direction. Instead of developing ERP packages on its own, the company has forked out a business alliance with Oracle, one of the world leaders in this segment. It provides marketing support, customisation and training for Oracle's products.

This, in a major way, protects KPIT from the stiff competition that other smaller software firms with own ERP solutions face from the established big players in the industry. KPIT, on the other hand, fine-tunes the existing and widely accepted ERP packages for the user's needs. KPIT has more than five years of experience in datawarehousing consulting. Among its clients were Pepsi Foods, Unilever, Johnson & Johnson, Gillette and on the domestic front Birla AT&T and Bharti Telecom.

A major part of KPIT's Rs 11.61 crore IPO proceeds was for pre-payment of a Rs 1.20 crore foreign currency loan. During the year to June 1998, the company had seen aninterest outgo of Rs 70 lakh. This pre-payment, according to company officials, would result into substantial lowering of interest outgo. During the current fiscal, the company expects a total income of around Rs 27 crore, a growth of 70 per cent over fiscal 1998 total income.