Flextronics Software Systems: On The Upswing

With Flextronics as the new owner, the top brass saw it as a god-sent
opportunity to help them scale up, while retaining expertise as a niche player.
This finally resulted in DIRECTV offloading its 55% stake to Flextronics
International for $226 mn.

The company's topline and bottomline grew by 34% and 40% y-o-y
respectively. Margins on the other hand, were flat. It, however, managed to
control staff costs-from 50% of revenue during 2003-04 to 47% during 2004-05.
Telecom software, higher other income-Rs 9.4 crore-and a lower rate of
growth in depreciations and tax costs helped net profits rise by 40%, from Rs
77.4 crore to Rs 108.2 crore. The year also saw FSS focusing on telecom service
providers and BPOs for future growth. The services sector contributed 81% of
revenues.