In its IPO in early August, Virtusa (NASDAQ:VRTU) got off to a shaky start, with its stock price dropping 15.2% to $11.86. The stock has rallied to $13.40, but it appears investors are still nervous after Virtusa reported its fiscal Q1 numbers.

Revenue spiked 46% to $37.4 million, and the increase from the previous quarter was a healthy 6.2%. Virtusa uses its operations in India to serve clients around the world. However, the company is feeling the pain of the rising rupee as well as increasing wages and turnover. Yet Virtusa was able to boost its operating income by 38% to $3.2 million.

Virtusa provides sophisticated information technology (IT) consulting and application outsourcing and implements software. Some of its clients are Cisco (NASDAQ:CSCO), Oracle (NASDAQ:ORCL), and BT Group.

The competition includes biggies like Infosys Technologies (NASDAQ:INFY), Wipro (NYSE:WIT), and EDS (NYSE:EDS). But Virtusa says that a key differentiator is its "platforming" approach -- it looks for common elements when developing technologies, which allows for creating standardized modules. The upshot is higher productivity. This sounds fine, but Virtusa's competitors also have similar practices. Such things are essential to remain competitive.

Virtusa gets about 49% of its business from its top five clients, and it mainly serves the communications/technology, financial services, and media industries. According to the company's prospectus, there are several financial services clients, which include JPMorgan Chase (NYSE:JPM) and Bear Stearns. These firms have exposure to buyout loans, hedge funds, and subprime debt. 

On the conference call, Virtusa indicated that there are no apparent signs of weakness from the financial clients. However, the credit crunch is still in the early stages, and it takes time for budgets to change. For a relatively small company like Virtusa that has a concentrated customer base, there could be some risk to shareholders if a slowdown does take hold.

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Fool contributor Tom Taulli, author of The Complete M&A Handbook, does not own shares mentioned in this article. He is ranked 2,878 out of more than 65,000 investors in Motley Fool CAPS. The Fool has a disclosure policy.