i-Flex Solutions: Flex Appeal

i-flex product revenues at Rs 492 crore, was way above nearest competitors like Infosys at Rs 136 crore and Polaris at Rs 98 crore. Its flagship product Flexcube contributed the lion's share adding 45 new clients, including HVB Group in Germany, and Nippon Shinko bank in Japan and derived 55% of its FY 2003-04 product revenues from the developed markets. Laurels there were several: Flexcube was ranked the No.1 selling universal banking solution in the world by IBS, UK, for the second successive year. Interesting sidebar: neither Infy's Finacle nor OrbiOne from Polaris managed to make it even into the Top 5. The numbers reinforce the accolades: the unbilled license-fees, contracts entered but yet to be implemented, stood at $36 million, nearly 35% of its product revenues for the
year.

The commercial availability of Reveleus, a treasury-related risk management product with BI and analytics tools, and acquisition of US-based SuperSolutions, that brought DayBreak, an advanced consumer-lending product suite allowed i-flex to provide a comprehensive offering catering to all segments-retail, corporate and investment banking-something not only Finacle, but even the likes of global brancds like Globus or Equation could not boast of.

One positive spin-off was the increased US penetration. While Reveleus boasted of key wins like IMF and American Stock Exchange, DayBreak brought 20 existing US clients including Mitsubishi Motors Credit, and Harley Davidson Financial Services among others. The honeymoon with Uncle Sam was further sweetened by PrimeSourcing, the company's services arm, which in fact grew faster than products. However, services could very well become the Achilles Heel for i-flex. At more than Rs 300 crore, it is a significant contributor to the total turnover and hence any billing rate pressure would pull down the margins. More importantly, the 45% dependence on Citgroup entities in FY 2003-04, otherwise a cushion during slowdown, could become a serious bottleneck.

Lastly, the domestic market is one area where Infosys has forged well ahead with a large number of PSU banks in its bag, while barring HDFC Bank, i-flex has little to boast of.