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Our Bureau

Bangalore , Jan 20

A SHARP decline in its products business impacted Sasken Communication Technologies Ltd's profits for the third quarter-ended December, 2005.

Sasken's consolidated net profit for the quarter dropped by 87 per cent year-on-year to Rs 18 lakh as against a net of Rs 1.43 crore in Q3FY05.

The drop was due to the provision of Rs 6.7 crore made for an arbitration in a dispute with a customer.

However, revenues grew 31 per cent to Rs 75.94 crore as compared to Rs 58 crore in the corresponding quarter last year.

On a sequential basis, a sharp decline in products revenues weighed down on the company's earnings by 12 per cent.

The net profits fell by 98 per cent as a result. Software services revenues during Q3 FY06 grew by 4.1 per cent accounting for 97 per cent of total revenues, while the products revenues fell by 86 per cent.

The fall in revenues and profits notwithstanding, the Chairman of Sasken, Mr Rajiv Mody, said, "Our services business continues to show momentum with a healthy increase in offshore revenues. The Service Provider offering that we launched last quarter has helped us make inroads with global operators. Internally, a strong focus on operational efficiencies has resulted in better utilisation rates."

During Q3, Sasken set up a development and support centre in Nuevo Leon, Mexico through its wholly-owned subsidiary - Sasken Communication Technologies Mexico S.A De C.V.

The company also strengthened the Integrated Solutions product line by investing in IXI-Connect Operating System, licensed from an Israeli firm IXI Mobile.

The company added 38 people on net basis during the quarter, taking the total employee strength to 2,504.

Sasken shares ended lower by 1.92 per cent on Friday at Rs 344. 35 on the Bombay Stock Exchange.

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