Tata Infotech, the second largest IT arm of the Tata group, has embarked on an initiative aimed at rationalising its businesses in view of the slowdown.

"We are also relocating people, especially in the US, and are moving them to projects which are more promising and which provide greater value proposition," Jain added.

The company had stated earlier its focus would be on systems integration since it could be leveraged to offer clients total solutions as well.

Currently, almost 55 per cent of the company's revenue comes from overseas software services. The remaining is from training and manufacturing activities.

"There is also a strong emphasis and focus on technology and domain expertise and we are concentrating on areas where we have an advantage. However, considering the current situation the focus is more on maintaining our existing customers and servicing them in the best possible manner," Jain said.

Tata Infotech has increased its investments in marketing and is looking at ways to sell more in the current situation. On the future course of investments, Jain said: "Investments are bound to be slow and investments would largely be incurred in marketing since that is one way of spending today for a return later, and which is in the foreseeable future."

In yet another measure to maintain its profitability, the company is also having tight procedures to prevent bad debts especially in light of its experiences towards clients heavily dependent on venture capitalist funds. Exposure to these customers have by and large been provisioned for already and no future liabilities are seen arising.

"Business during this quarter continues to be extremely tough and challenging. Decisions by customers relating to IT spending continue to be postponed or put on hold. Incidentally the current situation is not due to the September 11 events but was existing even prior to that. We are therefore of the view that the business situation for the next 4-5 quarters will extremely tough," Jain said.