One of India's leading software companies has seen its profits double in the last three months.

But Satyam Computer warned that its full-year profits would not be as buoyant as previously predicted.

Satyam - India's fourth-biggest exporter of software - gets about 78% of its revenues of the US and the slowdown there has encouraged many people to delay their investment.

Despite weaker share markets worldwide, Satyam still plans to sell part or all of its stake in its subsidiary Satyam Infoway, India's leading private internet service provider.

Second-quarter net profit rose to 1.34bn rupees ($28m) from 669m rupees in the previous quarter. Its shares hit a high of 169.8 rupees on the news, before falling back to 148.6 rupees.

US impact

Satyam admitted that its immediate growth prospects were "flat", but was keen to play down the impact of the US slowdown on their business.

"Last year, we grew at more than 75% in revenue terms. This year, we are placing it at 30% to 32%, that is a significant drop," Satyam's chairman Mr Ramalinga Ragu told the BBC's World Business Report.

India's software industry is one of the country's major successes, with some 60% of its exports directed to the US, accounting for about 2% of the country's gross domestic product.

The growth rate for the value of software exports, which used to stand at 50% annually, is likely to slip to 20% in 2001-02.

Companies like Infosys Technologies, Satyam Computer Services, Wipro and Tata Consultancy Services of the Tata Group, which account for more than 80% of the sector's export revenues, have been identified as the driving forces behind the industry.

Radar

The real impact of the US slowdown is that Indian software companies that don't have Europe on their radar screen will now increase their exports.

Already Europe counts for about 25% of Indian software exports, compared with 18% a few years ago. "We would like to see 30% of our global business coming from Europe," Nascom's chairman, Phiroz Vandrevala, told the BBC's World Business Report, at a conference in London.

Satyam's Ramalinga Ragu added: "Europe is our fastest growing market."

Others argue that their sound business model will sustain them.

Tata Consultancy Services' chief executive, Subramanian Ramadorai said: "The longevity of our relationships is what is going to sustain us."