The Hindu Business Line : Hughes Soft net doubles on exports

HUGHES Software Systems Ltd (HSS) has reported a 105-per cent increase in net profit for the quarter ended September 30, 2003 at Rs 17 crore as against Rs 8.3 crore recorded in the same quarter last year. Net sales during this period increased by 63.15 per cent to Rs 85 crore from Rs 52.1 crore. About Rs 82 crore of it was derived from export sales.

The sales growth and net profit growth numbers for the second quarter are higher than the guidance that had been given by the company. It had given a sales growth guidance of 55-60 per cent and a net profit growth guidance of 90-100 per cent.

Briefing presspersons on the financial performance of the company, Mr Arun Kumar, President and Managing Director, HSS, expressed confidence on the continuous acceleration in telecom business in the medium term.

"Last year, telecom was deeply hit. Opportunities within telecom are now beginning to come back slowly. It is our large accounts that have brought in the predictability in performance", Mr Kumar said.

About 90 per cent of the total revenues is generated from top seven customers of the company. HSS has added 14 new customers during this quarter.

The company has also upped its profit growth guidance for the financial year 2003-04 from 60-70 per cent to approximately 80 per cent (year on year). There is, however, no change to the guidance on the sales growth that stood at 55 per cent to 60 per cent (year on year) as indicated during last quarter.

Mr Arun Kumar, however, declined to comment on whether the profit guidance for the financial year 2003-04 was "conservative", given that HSS had reported a 105 per cent jump in net profit in the second quarter over the corresponding quarter last year. "It is better to come with prudent guidance and enjoy predictability", he said, while highlighting the existence of pricing pressure in the company's businesses.

For the third quarter ended December 31, 2003, HSS expects revenues to grow 55-60 per cent and net profit by 60-65 per cent.

He also said that about 100-200 people were to be recruited for the telecom business in the coming months.

"We added about 86 people in Q2", he said.

On the issue of an appreciating rupee against the US dollar, Mr Kumar said that this was indeed a cause for concern. "The impact is really predicated on the hedging strategies adopted by the company. We have been partially able to hedge this appreciation through the limited mechanisms that are at our disposal", he said.

DSE delisting: The shareholders of HSS Ltd have approved the voluntary delisting of equity shares of the company from the Delhi Stock Exchange, according to a communique issued to the Bombay Stock Exchange.

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