The story is no different in the second-quarter. In fact, the first-half results of 12 early-birds in the IT sector indicate an average sales growth of over 80 per cent and a triple digit rise in bottomline. So, what is sustaining the growth in the software sector, in the post-Y2K euphoria? The answer lies in the change in business profile. Take for instance, Infosys Technologies. The company has been able to more than compensate for the decline in revenues from its Y2K business with a spurt in income generated from E-commerce projects. The revenues from this stream accounted for 10 per cent of total revenue between June and September 1999 compared with 6 per cent in the first quarter. On the other hand, the contribution from the Y2Kbusiness is down to 9 per cent from 12 per cent during the same period.

In the case of Satyam Computers, the proportion of Y2K business has gone down from around 19 per cent in the first-quarter of FY 2000 to as low as 5 per cent in the second-quarter. E-commerce is the buzzword with Satyam as well.

Mastek Limited has also shifted its gears. From developing information system packages for corporate clients to offshore project development and finally to e-commerce infrastructure development and Internet-related business. Mastek has set up an Internet group in Pune and the division contributed over 10 per cent to total turnover in the first-quarter ended September 1999. Silverline Industries, which is in news thanks to the merger and ADR rumours, has also forayed into new technologies -- Internet and web-based solutions. With the information superhighway offering vast untapped potential, the shift is understandable. Says an industry analyst, ``The Internet and e-commerce revolution has rapidly re-defined the rules of doing business in every industry, creating, in its wake, a series of opportunities and challenges. Initiatives to enhance capabilities in this area have started yielding good results for the software sector.'' The future for the IT sector clearly lies in the Internet business. But here, too,those moving up the value chain will be the winners of tomorrow.

Infosys Technologies

The appreciation in the Infosys Technologies' stock over the past two months is mind-boggling. From Rs 4500 in July-end to an all-time high of Rs 8245, a gain of over 80 per cent. The company never ceases to amaze marketmen and researchers alike. In the first-half, the company's annualised EPS was up 18 per cent from the corresponding period last year, an amazing feat if one considers the Rs 17 crore addition to the paid-up capital. It is not surprising, therefore, that the attractive EPS of Rs 76 is discounted by a multiple of 104. According to analysts, the stock is now in a correction phase and could touch the Rs 7000-level. ``It will be healthy for the stock to touch Rs 7000-7500. If it does, the upside potential for the stock is immense,'' says a technical analyst. Infosys' future will come from e-commerce. Sighting a vast potential for e-commerce, especially in the US, after 2000, the company is in the process of restructuring itself at a cost of Rs 3.5 crore to grow in this area.

Satyam Computers

In the first-half, Satyam Computers's total income has vaulted by more than 70 per cent to Rs 294 crore from Rs 170 crore in the corresponding period last year. Yet, investors do not have much reason to rejoice as the sales figures are for the consolidated entity, formed after the amalgamation of three group companies with Satyam Computer. The amalgamation was approved by the courts in August, 1999, and became effective from April 1. Hence, the figures for the first half of fiscal 1999 and 2000 are not comparable.

However, there are a number of factors in Satyam's favour, which are driving the stock on the bourses. One, the company has drastically cut its exposure to the Y2K business, which was the highest among the top-rung IT companies.

``Satyam's exposure to the Y2K business was a cause of worry for investors. But, the company has effortlessly shifted gears and is now concentrating on generating revenues from the lucrative E-commerce business,'' says an IT analyst. The other factor weighing heavily in favour of Satyam Computers is the forthcoming ADR of its 70 per cent subsidiary, Satyam Infoway. The ADR listing of the subsidiary will definitely improve Satyam's valuation on the domestic bourses. On the bourses, the Satyam stock has moved up by nearly 60 per cent from an ex-bonus price of Rs 952 on August 16 to the current levels of 1520. ``The Satyam scrip has recently formed a new top in the overbought RSI zone and is currently undergoing a correction. This can be used as an opportunity to enter the counter at levels below Rs 1100-1200,'' says an analyst.

Mastek Mastek Limited is clearly the star performer of the second-quarter, both in terms of the growth in bottomline and appreciation in the stock. On BSE, the the stock has risen from a little over Rs 550 in July-end to an astonishing Rs 4044 in early October. Net profit in the first-quarter (July-September) has galloped to Rs 5.72 crore from a paltry Rs 62 lakh in the corresponding period last year. Growth has come from opening up of new offices abroad and offering new technologies. A major focus area is e-commerce infrastructure development and Internet-related business. The company has undertaken such projects in the US and is now expanding operations to the UK and Germany, where it already has a presence. Mastek's Internet group has over 200 employees and the company is leveraging on its US experience to bag more projects. Like Infosys, Mastek also re-invest itself as a E-commerce entity. Towards this end, it plans to invest around Rs 80 crore over the next 2-3 years in e-commerce infrastructure.