Hughes Soft Q3 net up 110% at Rs 23.9 crore

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Hughes Software Systems (HSS), a leading communication software services provider, today announced a 110 per cent rise in net profit for the third quarter ended December 31 at Rs 23.9 crore.

Its sales grew 69 per cent year-on-year at Rs 96.5 crore. Total income looked up by 67 per cent at Rs 98.8 crore.

Based on the current performance and the outlook for the future, the company said that sales for the year should be between Rs 356 crore and Rs 361 crore, which translates into a year-on-year growth in the range of 62-64 per cent.

Profit after tax should be anywhere between Rs 78-81 crore, or a growth in the range of 106-114 per cent on a year-on-year basis, a company statement added.

Pradman Kaul, chairman said, "HSS is generating strong business momentum on the back of its strategy of prudent diversification and penetration in the telecom domain. This is being reflected in the revenue and earnings growth. As the momentum builds up further, we expect to significantly strengthen our competitive position."

"Our profitability moved up sharply from the baseline of 21 per cent to 24 per cent for the quarter on the back of royalties received. This validates our strategy of doing selective business on a risk-reward basis. Progress made by HSS on new initiatives particularly the telecom service provider business was most encouraging. The growth momentum is strong as we move to cross the $100 million turnover mark in 2004-05, while striving to preserve our baseline profitability," said Arun Kumar, president and managing director of the company.

The company added Rs 9.2 crore to its cash and bank balances, further improved its debtor turnover ratio to 70 days, and continued to carry a healthy order backlog.

The earnings before interest depreciation and tax and net profit margins improved by 14.3 per cent and 23.5 per cent, respectively, from last quarter levels, on account of better absorption of overheads over higher volumes and royalties, the statement added. During the quarter, the company added 17 new customers for products and services.

The firm stepped up its recruitment drive by adding 202 employees in the third quarter and over the next 12 months it plans to add 1,000 employees for its software and IT-enabled services business.

Hughes Software share price closed at Rs 600.60 on the BSE on Thursday, after touching an intra-day high of Rs 617.