"We are really at a very, very preliminary stage of the acquisition," Nandan Nilekani, managing director and Chief operating officer of Infosys, said.

"We won't be able to give you a time frame at this point."

Nilekani said Infosys was presently looking at the strategy for acquisition and the kind of companies that can be acquired.

Infosys, Nilekani said, was also in the process of evaluating a suitable location for setting up its software development centre outside India, and was checking whether there were any Indian government restrictions.

Infosys in March became the first Indian firm to list on the US Nasdaq market. The company had then said that it would use the currency from the Nasdaq listing to make acquisitions.

The firm's American Depository Receipts (ADRs) climbed sharply totouch a high of $121 at the Nasdaq market last week, but fell this week to close on Tuesday at $85 3/4.

Last month, Infosys chairman and Chief executive officer NR Narayan Murthy told the annual shareholders meeting that whenever Infosys decided to acquire a company it would be a software product company with a large service base.

Nilekani said Infosys will stay focussed on the software services sector and products will continue to account for two to three percent of total revenues.

"We see the world really going towards the services economy. Services are becoming the name of the game and our clear vision is to be a global software services company," he said.

During 1999-2000 (April-March), business from the E-commerce sector would be a big driver for Infosys, Nilekani said.

"Another big area is in telecommunications where we are working with a number of telecommunication companies because there is a huge transition in that industry from voice to data and digital networks," he said.

Besides these,Infosys is also looking at engineering services and the Financial services sectors, Nilekani said.

He said software business from the conversion to the Euro currency in Europe had not taken off as expected, but foresaw more opportunities arising.

"People expect that by 2001 when the Euro becomes a standard currency and they start eliminating the existing currencies we expect to see another spurt of activity," Nilekani said.

After announcing its Financial results for the first quarter of 1999/2000 (April-June), Infosys had said that E-commerce contributed to 6.4 percent of its total revenues in the quarter, as against 5.0 percent in the previous quarter.

The company reported a net profit of 606.1 million Rupees ($13.3 million) during the first quarter against 236.7 million Rupees ($4.78 million) in the year-ago quarter.