The share price of Hinduja TMT surged today on sustained buying by institutions. The stock hit the maximum permissible upper band of 20 per cent to close at Rs 177.30 on the Bombay Stock Exchange. Over 7.11 lakh shares changed hands.
According to market sources, the rally counter was due to huge institutional buying. There were rumours that one institutional investor has placed a purchase order for 15 lakh shares. Analysts said there have been series of reports which led to the rally. There were talks that company's infotech-enabled business looked hopeful.
In the last 37 trading sessions, the scrip has surged by 143.5 per cent to Rs 147.75 on 18 February from Rs 60.70 on 27 December 2001. In the same period, volumes reached a high on 11 February at 7.39 lakh shares, and a low of 12,220 shares on 28 December 2001.
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Recently, Hinduja TMT bagged an order for its call centre business from an US-based telecom client, which enables it to move up the value chain by handling billing related calls. This order, initiated with 200 call service representatives (CSRs), has already become operational and the capacity would be scaled up to 600 CSRs by June 2002.
Earlier, in September 2001, the company had bagged its first three-year call centre contract from a $2 billion integrated communication provider based in the US for servicing claims processing. According to company estimates, revenues from this contract could exceed Rs 300 crore.
Hinduja TMT has set itself a target of setting up between 2,000 to 3,000 seats over the next few years with the aim of becoming a significant player in the call centre business.
Analysts said the scrip's rise is also attributed to rumours that the company is in talks with two major industrial houses to sell its cable services business (In Cable).
Formerly called Hinduja Finance, the company has transformed itself from a non-banking finance company (NBFC) to an IT company in the last couple of years. It has made IT-enabled services as its thrust area in its new business model, based on the recommendations of consulting firm Accenture. It has developed expertise in the domain areas of manufacturing, automobile, telecom, banking and financial services.
Meanwhile, the company's financial performance has been satisfactory. For the quarter ended 31 December 2001, it had posted a net profit of Rs 13.10 crore (Rs 12.43 crore) on an income of Rs 20.16 crore (Rs 22.26 crore). IT-enabled services contributed Rs 17.59 crore or over 87 per cent of the revenues and Rs 12.04 crore or 91.92 per cent of the net profit for the quarter.