Particularly striking are the results for the December quarter, which have been splendid, despite the rupee appreciating by 3.6 per cent over the period.
India's software and services exports grew by a compound annual rate of 30.4 per cent during 2001-06.
That is exceptional in itself as the early part of the decade saw a slowdown because of the dotcom and telecom bubbles bursting, followed by the 9/11 episode in New York that set back global business sentiment as well as business visits. Growth picked up sharply since 2003 to give the overall trajectory.
And 2006-07, it seems will see new peaks being scaled. The first three quarters have seen leaders achieve a topline growth of well over 40 per cent.TCS has hit a quarterly run rate of a billion dollars, taking it towards the $4 billion milestone, while Infosys is headed for the $ 3 billion mark.
Very rapid growth is usually bought at a price. Japanese and Korean firms, during their aggressive expansionary phase have often sought global market share by temporarily ignoring margins. But the Indian IT majors have also posted bottomline growth of well over 40 per cent.
Infosys has performed the best with net profit growth (on a year on year basis) in three successive quarters going over 50 per cent. In the latest quarter, TCS has scored a net profit growth of 49 per cent and HCL Technologies 58 per cent.
The numbers are the result of several factors all playing into each other. Offshoring has become mainstream even as anxieties over the consequences of globalisation have gripped the skilled middle class in the developed economies.
And the Indian companies have done very well for themselves to be able to grab the biggest share of these offshoring orders. Top Indian firms have been able to deliver in terms of both quality and innovation and so are winning more complex work and bigger deals.
Phiroz Vandrevala, EVP, TCS, sees TCS's performance as a result of its "well articulated strategy". At least two of the large deals the firm won recently, resulted from the capabilities that it gained from the acquisition of the Australian firm FNS. Plus, large deals won earlier like the ABN Amro one have gained traction.
Tech Mahindra, which bagged a $1 billion deal from BT, saw its top line grow by 131 per cent and bottomline by 122 per cent in the December quarter.
The BT order ensured there will be a continued flow of work and above average growth will remain the norm. Unsurprisingly, its newly listed stock is rivalling that of Infosys in attractiveness. For the industry as a whole, Vandrevala expects current growth and margins to persist right through financial year (2007-08).
Perhaps the most dramatic example of exceptional growth is Cognizant, which "has been posting industry leading revenue growth of over 50 percent for the last 12 quarters," says R Chandrasekaran, president and managing director.
This has catapulted Cognizant to the number four position in the software league table, displacing Satyam and is attributed to the firm being very well positioned in the healthcare and life sciences segment which has taken to offshoring in a big way. This segment accounts for 22 per cent of the firm's revenues and the duo has been growing at more than 75 per cent.
Even till a year or so ago, conventional wisdom was that the industry is consolidating and there was not much hope for tier two firms that do not have niche offerings.
But a string of tier two firms like Sonata Software, Geometric Software and iGate too have done well. Asserts iGate chief Phaneesh Murthy, "We do not believe that a tier-II service provider should develop a niche.
There is enough room to offer full services, even with the four top players around. There's no stopping these tech companies.