In 2000, after a bitter and protracted legal battle, Japan based Fujitsu Corp. and India’s RPG Group settled for an out of court settlement and merged their operations to create Zensar Technologies, a Pune based tier two IT services company.

One among those lofty ambitions was to reduce the number of engineers employed to develop software and enable computers to do the coding. Five years later, Zensar is one of the top 20 IT services companies in India and the developer of the Solution Blue Print, a new innovation that reduces manpower involved in developing software by up to 60 percent.

“What sets us apart from other companies is our uniqueness in innovation and technology. Our focus is to remain specific to innovation,” says Ganesh Natarajan, CEO Zensar. So much has innovation been part of the company that the company is expecting its proprietary product SBP, also called as the migration services, to provide significant revenues over the next three years.

With a market cap of $102.95 million and $21.57 million in consolidated revenues for the quarter ended June 2005, Zensar (BSE: ZENSAR) is still a small company when compared to the top tier Indian IT companies. And it hasn’t set out to take the top tier companies head on. Instead its strategy is to remain niche in the area of migration services. “Over the next three years, revenues from migration services will certainly grow by over 100 percent, from $15 million next year to $30 million in the following year,” Natarajan says. Their revenues from the U.S. operations comprise just 12.94 percent at $37.04 million than compared to U.K. which was way ahead with 46.08 percent and rest of the world contributing as much as 50.52 percent to their revenues. To further make its case, the company acquired a U.S. based SAP services provider OBT Global Inc and its offshore affiliate OBT Global Pvt Ltd.

“Zensar is doing quite fine. In terms of performance it can do better than what it is doing today. However I expect them to do better over the next four-six quarters,” says Apurva Shah, analyst with ASK Raymond James in Mumbai. While he thinks the company has more potential to grow and reap rich dividends, he also says the “management is not consistent in saying in which year they would consolidate their accounts as their quarterly performances have not been very good. They were below average.”