The company focuses on five key verticals - securities, finance, insurance, healthcare and telecom. It has added a number of new clients in the previous year including NASDAQ, Clearstream and the Development Bank of Singapore.

Its alliance with NASD, the parent of NASDAQ, will give it the image of a global solutions provider for the security industry, especially stock exchanges which are in the process of upgrading their technology in line with market requirements.

The expansion of its computer education network to neighbouring countries like Nepal, Hong Kong, China and Sri Lanka and an increase in the total number of education centers from 150 to 350 has helped SSI widen its geographical reach. The computer education business contributes 80 per cent to the company's topline and has a vast potential to be exploited.

The acquisition of Agenda Marketing, an Internet solutions company and Inndsoft Systekh will result in organic growth for the company in the future. It is also expanding in the high-end software services market.

The company's operating expenditure has moved in tandem with total income and has registered a growth of 137 per cent to Rs 126 crore. The operating profit has gone up from Rs 34 crore to Rs 88 crore while the OPM has moved up slightly from 39 per cent to 41 per cent.

The depreciation cost has gone up by 144 per cent due to the setting up of an additional software development unit in Chennai.

The centre was funded out of the proceeds of the GDR issue. The interest cost has also fallen by 37 per cent to Rs 4 crore.

The company's bottomline has jumped by a phenomenal 215 per cent to Rs 57 crore from Rs 18 crore in the previous year. This is one of the highest growth rates achieved by any software company in India.

The EPS however, has gone up by 192 per cent to Rs 45 due to the dilution of equity through the GDR issue and due to acquisitions through stock swaps.

The company has taken many initiatives in its education business and has partnered with international majors like Oracle and Microsoft to provide quality computer education. Its joint venture with NASDAQ will also fuel its growth, as it has opened up an entire new avenue for the company.

The effect of these initiatives on the company's performance should be reflected in next year's results.

Kinetic Motors
A dismal performance by the scooter segment has hit the two wheeler industry hard. The market for geared metal body scooters is seeing a decline due to a decisive and visible shift in consumer preferences towards motorcycles. As a result, the motorcycle segment is growing by leaps and bounds. The scooter segment has witnessed a negative growth of 10 per cent in the first quarter of the present fiscal. However, there is an interesting factor at play here.

Kinetic Motors has been able to buck the trend when other manufacturers, which include the Bajaj Auto and LML have been groping in the dark for effective strategies to fight off the recent slump. The company has reported a 30 per cent growth in the sale of scooters in Q1 as against the negative growth that other companies reported. It sold 31,016 scooters as compared to 23,936 scooters in the last comparable quarter. Bajaj Auto on the other hand, sold 1,42,190 scooters against last year's figures of 1,68,425. LML also reported a negative 12.5 per cent growth in scooter sales. Another significant player Maharashtra Scooters, also met the same fate.

Kinetic Motors' first quarter results for the period ending June, 2000 have shown promise. Riding high on the demand for its non-metal gearless scooters, the company has reported a 15.21 per cent growth in the topline.

The operating profit jumped from Rs 4.01 croe in the last comparable quarter to Rs 6.05 crore in the present quarter. The net profit too zoomed up by 64 per cent to Rs 2.02 crore from Rs 1.23 crore in the corresponding period in the previous year. The company enjoys reasonably higher profit margins owing to the comparatively higher prices of its products.

Kinetic is operating in the premium scooters segment wherein factors like comfort and stabilty are significant. Auto gear and autostart models are preferred to older models despite higher costs. Says Manindra Gupta, an analyst with SBI Caps, "The earlier metal scooter models will not work anymore." The statement is corroborated by the shift in auto companies' product mix. They have been trying to introduce new variants in the motorcycle segment and the scooterette segment. The markets will witness a slew of motorcycle model launches in the next couple of months.

These include Adreno and Energy 100 cc, bikes from LML, the heavier Kawasaki models apart from scooterettes from the Bajaj stable and Kinetic's 100 cc Challenger bikes. However, the moot point is - how long will Kinetic Honda be able to repeat its volume growth in the event of a shift towards motorcycles and in the event of competition hotting up in the premium segment? Despite the popularity of motorcycles, the premium scooter segment will be able grow at a reasonable pace. However, if the company teams up with Kinetic Engineering, it could do better in terms of offering the entire range of products under one roof. The distribution network too, could be utilised more effectively as the company has decided to jump into the fray for motorcycles as well.

KSESH (with contributions from Prashant Kothari and Sachchidanand Shukla)