HCL Infosystems, a Noida-based IT infrastructure major, has decided to increase focus on its fast-growing system integration (SI) business, which involves designing solutions and deploying equipment around information and communication technology (ICT).

The two-year-old SI business contributes 20% to HCL Infosystems' revenues and is expected to grow by 25%, a May report by equity research firm CLSA said.

The new focus is clear in the new contracts that the company won from the Punjab government and from Africa for e-governance projects. About 53 countries in Africa will be connected under the Rs 80-crore African project.

The CLSA report described the order flow of e-governance and insurance projects as 'good'.

HCL Infosystems' Nokia mobile handsets distribution business is doing well. George Paul, executive vice president of HCL Infosystems, told DNA Money, "We are distributing the handsets through an equal partnership with Nokia. The revenue from this business segment has remained flat due to a surge in demand for handsets."

However, CLSA analysts Bhavtosh Vajpayee and Nimish Joshi, in their report, expect 'conservative numbers for Nokia growth in the next two years'. They observe that growth will depend 'heavily on replacement demand' rather than on the demand for new handsets.

The report said HCL Infosystems' Nokia handset business grew 88% year-on-year in December 2006, 50% in June 2007, and 26% in March 2008. In FY07, the company sold 15.7 million Nokia handsets and in FY08, 27.2 million. It is expected to sell 41.4 million handsets this fiscal.

To offset the slump in the handsets business, the company has planned digital lifestyle stores under its brand name of 'Digilife'. By year end, it hopes to launch 100 Digilife stores. "We have already set up 68 stores and a few are coming up in Gujarat," said Paul. Of these, six stores are under the company, with most others following the franchisee model.

Meanwhile, HCL Infosystems has tied up with US networking major Echelon Corporation to bring advance metering systems to India. To be used by the booming power sector in the country, the advanced meters would facilitate efficient usage of power and reduce wastage.