If anyone told you that board meetings of Infosys Technologies-the last such gathering took place last fortnight to review Infosys' first quarter results for 2003-do tend to get acrimonious, you'd find that a bit difficult to digest. After all, here's a board that unarguably boasts the most respected management team in India Inc, and for good measure such heavyweight independent directors as Professor Marti Subrahmanyam, Philip Yeo, and Senator Larry Pressler, to name just three.

What on earth could they be disagreeing about? Well, it so happens that at least at one such board meeting in the not so recent past, the executive directors on the Infosys board (Chairman & Chief Mentor N.R. Narayana Murthy, CEO Nandan M. Nilekani and coo S. Gopalakrishnan) didn't see eye to eye with a proposal of the independent honchos. The non-exec band was keen that the Chairman, CEO and coo take a hike in salary. Murthy, Nilekani and Gopalakrishnan weren't willing! Likewise, when this trio suggested an increase in the non-executive directors' commissions, the latter put their foot down. A $25,000 package they felt was fat enough (it is, isn't it!).

Such feel-good tales of management propriety-told to BT by one of the Infosys directors-appear unreal and sound unbelievable against a perceptual backdrop of greedy promoters stuffing their pockets and independent directors going through the motions before pocketing chunky commissions. But that's Infosys for you: Constantly setting new standards and never ceasing to pleasantly surprise. On the operations front, for instance, a quarter ago punters on Dalal Street violently ended the tech party by smashing all it stocks after Infosys' seemingly poor guidance for the year ahead.

SPECIALISED IT SERVICES Geometric Software

MANU PARPIA, MD, Geometric Software For Manu Parpia, size doesn't matter. not as much as growth and the creation of shareholder value. The Managing Director of the Rs 64-crore Geometric Software is clear he can't take on the biggies in the Indian it services arena (TCS, Infosys, Wipro, HCL). So he's chosen to specialise-in the niche area of product lifecycle management (PLM), which basically involves working with large global system integrators like IBM, EDS and MatrixOne, who in turn serve the automobile, aerospace and electronics sectors, which are the largest PLM users. A high-risk strategy? Perhaps, given that Parpia is putting all his eggs into the PLM basket. If the PLM market crashes-it declined last year, which explains 2002-03's single-digit growth-Geometric could well be history. But then again if Parpia hedges his bets by foraying into new areas, he would be just another plain vanilla Indian it services me-too. Geometric aims to become a $100 million company in four years-which means an over seven-fold increase since last year. The stock of the company, which went public in 2000 at a Rs 290 premium, is currently quoting at a little above Rs 400. As Parpia says: "It's a young stock. We are at a stage at which there's plenty of promise as well as great expectations. Now we've got to deliver."

Three months later, all is well-the guidance, and the first quarter results. More importantly, Infosys appears to be handling the pricing pressure successfully, and could soon achieve its much-avowed goal of getting customers to pay a higher price for the apparent higher value they're receiving. "What sets Infosys apart is the tremendous common commitment to absolutely honest processes of value-creation via impeccable delivery," says Dr Omkar Goswami, Independent Director on the Infosys board, who's also CII's Chief Economist.

In other words, the Infosys' business model is proving to be sustainable-and will continue to roll. "In many ways Infosys has been a curse, as it has raised expectations of investors by appreciating some 200 times (with its market cap going up from Rs 500 crore just after its IPO in 1993 to Rs 1 lakh crore at one point in time). There can be only one Infosys," points out Raamdeo Agarwal, Joint Managing Director, Motilal Oswal Securities, a Mumbai-based broking firm.

Yet, if the nineties undisputably belonged to Infosys-thanks to heady growth rates of over 50 per cent and mind-boggling market cap appreciation-just as the Ambanis put their indelible stamp on the eighties by creating world-scale assets and flagging off the equity cult in India, the decade ahead could witness the creation of many more Infosys-not necessarily it companies, but companies with sound business models, huge opportunities (invariably global), and world-class managements with high standards of governance.

The Next Infosys

The next big thing won't necessarily be new-age businesses, either. Indeed, right from given-up-for-dead smokestack sectors like auto components, to recently-emerged opportunities like healthcare, it-enabled services and it application software (yes products!), there's a new buzz of excitement hovering over India Inc.

Unlike in the past, it isn't as if Indian industry will be dominated by just one or two high-growth sectors or companies (it since the mid-nineties, petrochem since the eighties). Today, there are many more industries that are encashing the opportunities at hand by garnering a sustainable competitive edge via changes in mindset, technology implementation and cost-rationalisation, to name just three initiatives.

Steadily, they're beginning to up their return on capital even as they display the potential to absorb more capital, which is necessary to scale up operations. At the same time, they've put together management teams competent enough to grab the huge opportunity staring at them by executing complex business plans. And, not the least, they're practicing ethical standards, being transparent like never before, and even distancing family members from day-to-day running and company strategy (and bringing in independent directors who don't just warm the chairs)-after all that's important for raising capital from global investors.

APPLICATION SOFTWARE i-flex Solutions

RAJESH HUKKU, Chairman, i-flex Solutions Post-IPO last June, i-flex solutions had a market cap of $430 million. Last fortnight, the stock of the company with the world's No 1 selling banking solution hit the $1-billion mark. "Our job is to perform and inform," says Deepak Ghaisas, CEO (India Operations) and CFO (Global Operations). i-flex has been riding on the success of Flexcube, its umbrella suite of banking products, which at last count had 130 customers across 50 countries. The big question: How long will Flexcube rule the roost? 25-30 years, says Ghaisas, who's investing 12 per cent of revenues in R&D in a bid to improve the product's functionality, adaptability (to changing technology platforms) and scalability (it can now do 1000 transactions per second as against 100 when the product was flagged off). As for the market, it's only the surface that's been scratched: Currently it's only the banking and finance universe that's using such software. Says Rajesh Hukku, Chairman & Managing Director, i-flex: "The product-led nature of our business drives non-linearity into the model in many ways, whether it is the revenue to manpower equation, or customer relation longevity and value-addition." In the longer term, i-flex fancies the manufacturing, retail, services, healthcare and government sectors to use packaged solutions for their financial transactions. As Ghaisas puts it, IPR works better than just pr.

"Indian industry today has many areas of opportunity today, be it ITEs or pharma synthesis or textiles," says Rajeev Gupta, Executive Vice President, DSP Merrill Lynch. "Infosys showed us the way in their own way. We have to emulate them by pursuing an appropriate strategy, not necessarily the same one followed by Infosys," says Manu Parpia, Managing Director, Geometric Software, which hopes to become a $100 million company in four-to-five years by carving out its own niche of product lifecycle management in the it space.

Welcome to the new Infosys'. Let's rephrase that a bit. "We would like to be the next Microsoft or the new Siebel," grins Deepak Ghaisas, CEO (India operations) and CFO (Global Operations), i-flex Solutions, India's most successful products-driven company. Adds Baba Kalyani, Chairman & Managing Director, Bharat Forge: "We could do even better than the it sector. The Next Big Thing will be auto components."

i-flex has done the country a big favour by making the "Made in India" tag not just respectable, but saleable. Its Flexcube suite of banking products was the largest selling of its kind in the world last year.

Then consider the huge opportunity beckoning Apollo Hospitals in healthcare, a sector in which expenditure is expected to touch Rs 200,000 crore by 2012, with the private sector expected to grab three fourths that. As Preetha Reddy, Managing Director, points out, Apollo has a headstart that will be "difficult to surpass".

HEALTHCARE Apollo Hospitals

Preetha Reddy (left), MD & Suneeta Reddy, Director (Finance), Apollo Hospitals If ambition were to be a yardstick for future expectations, the Reddy sisters of Apollo Hospitals would be half way there: Suneeta and Preetha Reddy, daughters of patriarch Dr Prathap C. Reddy want their company to figure in the Fortune 500 list in five-to-seven years, and be recognised as a "global healthcare brand". What should help them get close to that destination is the headstart they enjoy in India: Apollo is the only national brand. "It is probably the only healthcare group in the country to have recognised the need for a professional management," says Preetha Reddy, Managing Director. As far as potential goes, this clearly is one market that can't run out of steam. Suneeta Reddy, Director (Finance), brandishes a McKinsey study that pegs the Indian healthcare market at a whopping Rs 78,000 crore, and the global sector at $3 trillion. That's probably why she's bullish about more than doubling turnover to Rs 1,000 crore in three years, from Rs 448.5 crore last year. Close to 60 per cent of revenue comes from the healthcare supply side, close to 35 per cent from pharmacy business and 15 per cent from the projects and managed beds division. "It's a highly-scalable model; many of our profitable businesses today were just management thoughts two years ago," says Suneeta. The sky's the limit is no hollow cliché for Apollo. -E. Kumar Sharma

And take a look at the buzz in the pharma industry: It's not just the high-risk, high-return drug discovery majors that are capable of striking it big. A number of lesser-known firms are earning their spurs in the lower-risk but high-return area of custom synthesis and contract manufacturing, with an eye on the international generics market. "That's where the bulk of value lies and where Indian companies enjoy a competitive advantage," says DSP Merrill's Gupta. Murli K. Divi, CMD of one such pharma firm, Divi's Labs, estimates the market for outsourcing of chemistry (for global Big Pharma) at $10 billion (Rs 46,000 crore).

But what's equally significant is that some of yesterday's downright no-hopers are taking advantage of changing global dynamics in their respective industries to not just create value for their shareholders but in the process become genuine Indian multinationals with a sustainable competitive edge. Take, for instance, the textiles sector, which analysts estimate could be eyeing a $500-billion opportunity post-January 2005-that's the projected number for global textile trade-once textile quotas to the biggest markets, the US and the European Union, are dismantled. One of the players set to ride on this opportunity is Arvind Mills, which boasts one of the world's largest denim capacities, at 90 million metres. "We are vertically integrating to take advantage of the dismantling of quotas," says Jayesh Shah, Director (Finance). Arvind, which hopes to double sales and treble profits in five-to-six years, has got into the value-added garments sector. Reason: fabric is a capital intensive business where a rupee of investment results in just Re 0.7 of turnover. However, in garments, Re 1 translates into Rs 10 of turnover.

BANKING HDFC Bank

ADITYA PURI, MD, HDFC Bank The frenzy in banking stocks that resulted in even the heavily NPA-laden cats and dogs joining the party, may have abated slightly, but the flavour of HDFC Bank isn't seasonal. After all, there aren't too many banks in India that have less than 2 per cent of loans that are non-performing. The average for Indian banks is comfortably in double digits. Growth has also been rapid, with retail accounts growing at 50 per cent annually and profits at least 30 per cent over the past five years. Analysts don't see why the HDFC Bank can't continue growing at this fast pace for at least the next two years. The retail surge too shows little signs of flagging, and after recently getting into a cross-selling alliance with HDFC, Managing Director Aditya Puri has plugged one of the few glaring gaps that existed in the retail portfolio: housing finance.

AUTO COMPONENTS Bharat forge

BABA KALYANI, MD, Bharat Forge To dub a company that's been around since the sixties as the next big thing in India Inc may sound daft, but then the Rs 690-crore Bharat Forge has just begun knocking at the doors of a billion-dollar opportunity. In the current year alone, some 15-odd auto and tier-1 ancillary majors will procure some $1.5 billion worth of components from India. For Bharat Forge, which supplies engines and suspension components to the likes of Daimler Chrysler, Caterpillar-Perkins, Renault, Mercedes and Volvo, the target is to make exports account for half of 2005's sales. Last year, overseas sales contributed 40 per cent to revenues, up from just 7 per cent in 1995. "Our journey towards being a truly global enterprise has only just begun," says Baba Kalyani, Managing Director, Bharat Forge. Clearly, like many other Indian auto components companies, Kalyani is counting on the dual advantage of low cost and quality engineering skills to move into the top league of Indian companies. By trimming costs, turning to technically-skilled manpower- "replacing musclepower with brainpower," as Kalyani puts it-and stretching its wings globally, Bharat Forge is now ready to make that big leap.

Despite Arvind's turnaround- interest costs have come down from Rs 360 crore to Rs 150 crore in the last two years, a consolidated loss of Rs 100 crore (including subsidiaries) has turned into a Rs 107 crore profit, and market cap has climbed 10-fold in a year-you'd be really sticking your neck out to tout this company as one of the next big things of India Inc. Perhaps one of the many garment exporters from Tirupur could command that sobriquet once it goes public. But another "old economy" stalwart, the 40-something-year old Bharat Forge could well be the horse to back. Soon, half of the company's sales will come from exports, thereby giving the company global scale as well as reducing the risk of its business model. The company has 24 international customers, including such names as DaimlerChrysler, Volvo, Renault, Honda, Cummins and Toyota. "By 2009-10, we will be a significantly different company, a truly global enterprise," says Baba Kalyani.

Unlike the previous decades, today's growth-oriented companies also follow good governance practices, less in letter and more in spirit. Ghaisas of i-flex, who lectures to BSE brokers on corporate governance on weekends, recollects why he decided to bring down his daily sales outstanding (DSO) to 80 days from 158 days: Investors and analysts weren't comfortable with the rather high DSO. Geometric's Parpia will proudly tell you that his company was the first to issue a "profit warning" when the company slipped into the red in the September 2000 quarter. Arvind Mills has reconfigured its board to bring in stalwarts like Jerry Rao, Deepak Satwalekar and Rama Bijapurkar (the last two named are also on Infosys board) as independent directors, even as the number of family members has been whittled down from four to two. At Bharat Forge Baba Kalyani is the only family member on the board.

Clearly, the horizon never looked as clear and bright for India Inc. The opportunities are there for the taking, at least for the few that have restructured operations to become efficient enough to ride the boom. Some of the names mentioned in this story may never make it as the next big things of India Inc, but they're representative of the growth potential that exits in the sectors they operate in. If there are management teams good enough to execute complex business plans within these sectors, and raise capital on the back of an impeccable record in terms of ethics, integrity and transparency, they'd be successful in building businesses that are global, sustainable and one of their kind. Like Infosys.

additional reporting by E. Kumar Sharma

CONTRACT PHARMA MANUFACTURING Divi's Labs

MURALI K. DIVI, CMD, Divi's Labs Once you are past the pages detailing the stories of the Dr Reddy's and the Ranbaxys in the book of Indian pharma- somewhere towards the middle of the tome-you will come across some lesser-known names. Like Divi's Laboratories. Divi's what? Well, if you are familiar with the goings-on on Dalal Street, you would have heard of this stock's spectacular rise since it went public earlier in the year. From a listing price of Rs 140, Divi's has surged past the Rs 500-mark. And there's little sign of the stock taking a breather. Divi's has positioned itself in the high-potential space of custom synthesis and contract manufacturing. "We are positioned to have long-term relationships with MNCs in drug discovery and development as we can meet their needs from the lab-scale needs to pilot project requirements and commercial manufacture once a product is launched," explains Murali K. Divi, the bearded, long-haired 51-year-old Chairman & Managing Director, a former associate of Dr K. Anji Reddy. Divi's gambit is a lower-risk strategy than drug discovery, yet promising returns that will assure non-incremental growth. And he's got it all worked out. The cost to create a capacity in India, he says, is a tenth that of Europe and the US. He put up his plant near Hyderabad in nine months against the norm of three years. "The outsourcing of chemistry is an over $10-billion market." Look out for Divi- and many other pharma companies that are eyeing that pie. -E. Kumar Sharma