Hughes Q2 net soars 52 per cent

Hughes Software Systems(HSS) reported 52 per cent growth in net profit on a standalone basis, for the second quarter of the financial year 2004-05.

Net profit was Rs 25.8 crore, compared with Rs 17 crore in the corresponding quarter in the previous financial year.

The company's net profit for the first half year of 2004-05 jumped 57 per cent to Rs 50.6 crore over the corresponding half year last year. Total income in the second quarter of FY 2004 grew 36 per cent to Rs 118.1 crore while sales grew 37 per cent to Rs 116.6 crore during the second quarter.

"This is a volume-led growth with prices remaining stable. Services have contributed significantly to this growth. Though there is some volatility in the product side, we are pleased with the numbers we have achieved," Arun Kumar, president and managing Director, HSS, told reporters here, announcing the results. He also said that there was an opportunity to selectively enhance prices in complex projects.

Repeat business also contributed significantly to the company's financials. "While we have added 14 new customers during the quarter, more business from the same customer is another key factor in our growth," Kumar said.

HSS bagged about 94 per cent repeat business in the services segment and 85 per cent from the products side during the quarter.

During the second quarter, HSS' on-site business witnessed a sequential increase from 14 per cent to 19 per cent in terms of revenue.

"Our off-shore business has gone up, but the on-site business, which is marginal, increased at a faster pace," Kumar said.

He said business from Hughes network services (HNS), the erstwhile parent of HSS, witnessed a 3.5 per cent sequential growth and a 20 per cent year-on- year growth.

"Business from HNS will remain stable," Kumar said. Kumar also said HSS expected Flextronics to become a key customer in the next one to two years, with double digit contribution to its revenue.