The survivors: Hughes Software Systems' Managing Director Arun Kumar (in suit) with his young guns

The year is 2000 and Hughes Software Systems' headquarters in Gurgaon, near Delhi, is a beehive of activity. In the eight years since it was founded, Hughes has grown into a Rs 120-crore company with 1,300 employees, 215 of whom are rupee millionaires. Business is booming, with the topline growing at an annual clip of 70 per cent.

Fast forward to 2002: The global telecom industry, which accounts for virtually all of Hughes' software services business, has collapsed; General Motors, which owns the parent of Hughes Software, Hughes Electronics, has had the Directtv business on sale for a while now, but without any luck; and Hughes Software's own employees, alarmed by the overnight collapse of the telecom industry and the uncertainty over ownership, are starting to leave for safer grounds, with the exodus reaching epidemic proportions the following year, when attrition touches a staggering 70 per cent.

Arun Kumar, Hughes' Managing Director of seven years then, decides to stick to his guns and stay focussed on the telecom sector, although the company does need to hand the pink slip to about a 100 employees. Sure enough, by the middle of 2003, the global telecom majors have started recovering, and Hughes' fortunes are up in tow. Annual revenues, which had dropped to Rs 229 crore in 2002-03 from Rs 248 crore the previous year, jump to Rs 368 crore in 2003-04. And the bottomline is up to Rs 77 crore from Rs 38 crore in 2002-03. (In the first half of this year, Hughes clocked a net income of Rs 230 crore and a net profit of Rs 51 crore.)

In between, Hughes also makes a couple of acquisitions (Tenet Technologies in Bangalore and a Lucent Technologies' division in Nuremberg, Germany), besides getting acquired itself by hardware manufacturing giant Flextronics in June this year. With the result, today, employee morale has surged and that, in turn, has put Hughes back into BT's top 10 list after a year out in the wilderness. Says Kumar: "Our good results are because of good and dedicated employees."

Kumar's self-stated goal now is to ensure that Hughes not only attracts the best engineering talent, but also retains them. For instance, it plans to hire more than a thousand fresh engineering grads from the batch of 2005 at various engineering colleges. But Kumar isn't assuming that all of them are waiting with bated breath for an offer from Hughes. He knows there's a downside his company must contend with: it's not the top paymaster in the industry. In fact, average starting salaries at Hughes are at least 10-15 per cent lower than those at industry leaders.

So what attracts people to Hughes? "We create a place where people love to come for the work and not necessarily for the money," says Adesh Goyal, VP (HR), Hughes. Most of its employees would second that statement. The work environment is informal and collegial. There are Friday evening parties, classes for sports and guitar, and now even salsa, and clubs for jazz music and theatre. Says Abhishek Sinha, an IT-BHU engineer and a five-year Hughes veteran who is now a technical leader: "I found my feet here faster than I would have anywhere else because my colleagues helped me out."

Kumar, for his part, is looking forward to the years ahead. With Flextronics as the new owner, he's looking at new technologies, new projects, and accelerated growth. "We will be adding a lot of new people and by early 2007, should be moving into our new campus in Gurgaon," says Kumar. It is his day after the near-death experience.