The next stage in the growth of the Indian IT services firms isstarting to take shape, as bellwethers like

Infosys

(INFY) - Get Report

and

Wipro

(SYMBOL)

flextheir muscles as strategic acquirers.

Rumors floated in India this weekend that Wipro was putting together a$7 billion buyout of European management consultancy

Capgemini

, one ofEurope's largest consulting firms.

The Hindustan Times

first reportedthe possible transaction, citing an unnamed investment banking source.

The deal talk is highly speculative, however, and follows rumors thatcirculated months ago that Wirpo's hometown rival, Infosys, was eyingCapgemini.

For its part, Capgemini says it is not in talks with Wipro, accordingto a report by Dow Jones.

Wipro couldn't be reached for comment.

Such merger speculation has taken hold in the past as analystsspeculate that acquisitions would help Indian firms gain instantcredibility for offering high-end business advisory services -- and takethem beyond their niche of software development and outsourcing.

The industry has already seen Indian firms step up their game bydeveloping subject matter expertise to embed themselves in theirclients' day-to-day operations. Hyderabad, India-based

Satyam

( SAY), forinstance, is offering engineering design for aerospace andmanufacturing clients.

And in July, Mumbai-based

Patni

(PTI) - Get Report

acquired a firmto help pharmaceuticals makers manage data from clinical trials andnavigate the drug regulatory process.

India-based outsourcing firms are also keen on setting up shops closerto their clients, and acquisitions would certainly help with thisprocess, says Ashish Thadhani of Gilford Securities.

But it remains highly uncertain whether an Indian firm would take outa major Western player.

Infosys' speculated bid for Capgemini, which never materialized, wouldhave "been at odds with the company's conservative acquisitionphilosophy and conscious effort to distance itself from the legacyconsulting model," says Thadhani.

In a recent interview with

TheStreet.com

, Infosys Chief FinancialOfficer V. Balakrishnan said acquisitions would be part of thecompany's near-term growth strategy, but that the firm would remainfocused on IT and information systems rather thanstrategic business consulting services.

Capgemini hails from the traditional management consulting mold,providing financial and operations expertise aimed at making clientsmore competitive. The company also offers resources to help companiesdeal with emerging issues such as reducing carbon emissions.

The persistent deal chatter has recently focused on Bangalore-basedWipro as a buyer because of the company's recent spate ofacquisitions. Since July, Wipro has announced roughly $900 million indeals. Its nearly $600 million takeover of Infocrossing, an ITservices and outsourcing firm, was the largest acquisition by anIndian software firm to date, according to Thadhani of GilfordSecurities.

Wipro's reported takeover of Capgemini would lift it into the sametier as firms like

BearingPoint

(BE) - Get Report

or

Accenture

(ACN) - Get Report

, adding an element of plausibility to the rumors.

Shares of Wipro closed up trading up 35 cents, over 2.2%, to$15.38, amid a broader rally in India's BSE stock index.

Shares of Infosys rose $1.31, or 2.9%, to $46.45.