New Delhi, Oct. 8: Hughes Software Systems today reported a whopping 105 per cent increase in its net profit for the second quarter ended September 2003 at Rs 17 crore. The company has been able to notch up this gain on the back of a successful diversification and market expansion programme.
Hughes has also revised its net profit guidance for the year 2003-04 to approximately 80 per cent on a year-on-year basis from the earlier 60-70 per cent, but retained the earlier sales growth forecast of 55-60 per cent during the year.
For the third quarter, Hughes has projected a net profit guidance of 60-65 per cent over the corresponding previous quarter and 55-60 per cent growth in sales. The company plans to recruit 200 more people to develop telecom related software.
During the half-year ended on September 30, the company’s net profit stood at Rs 32.3 crore, registering a growth of 154 per cent over the same period a year ago and sales increased by 62 per cent to Rs 161.5 crore on a year-on-year basis.
Total income for the first half stood at Rs 165 crore. The company added 14 new customers during the second quarter, said Arun Kumar, president and MD of Hughes Software.
“Prudent diversification and penetration in telecom domain has helped us expand addressable markets and create medium term growth drivers. The macro outlook on the global telecom market is still not very clear. However, we are seeing an increase in opportunities and look forward to a period of revenues and earnings growth,” said Pradman Kaul, chairman of Hughes.
In the second quarter, Hughes Software added Rs 20.2 crore to its cash and bank balances and maintained its profit margin. The pricing pressure, however, continues, said Kumar.
During the year, the company’s dependence on its parent, Hughes Network Services, fell to 19 per cent in professional services revenue from the earlier 29 per cent in the second quarter of last fiscal while non-HNS customers provided 57 per cent.
Products contributed 19 per cent and BPO contributed 5 per cent, Kumar said, adding the BPO business remained stable during the quarter and on track to contribute up to 8 per cent in 2003-04.