But earnings growth will be slower due to the seasonal effect of software firms typically making new recruitments in the first quarter to June 30, a move which increases overheads without a corresponding addition to revenue, local software analysts said.

"For the top companies we're looking at a sales growth of over 75 per cent compared with the first quarter of last year," R Sukumar, fund manager of Kothari Pioneer's Infotech Fund, said.

A range of new businesses including E-commerce and Internet-based applications, along with solutions for the millennium bug are driving growth, analysts said.

"Overall, we see a continuation of the fourth-quarter growth, with profits at most companies growing at about 50 to 55 per cent year-on-year," said Srividhya Rajesh, software analyst at Sundaram Newton Asset Management Co Ltd.

Although robust, the profits comparewith an even more dazzling first quarter last year when earnings at a number of firms grew by 100 per cent or more. This year the sector is expected to also benefit from a first-quarter drop in the rupee, the analysts said, noting that exports comprise a large chunk of earnings for Indian software firms.

Since April when the current financial year began, the rupee currency has fallen 1.85 per cent to around 43.25 per dollar, mainly due to fighting in the disputed region of Kashmir where India is battling Pakistan-backed intruders.

Blue-chip Infosys Technologies Ltd is expected to lead the sector with an expected 92.2 per cent rise in net profit, according to a Reuters survey released last week.