The Hindu Business Line : Hughes Soft net down 27 pc — To pay Rs 2; sees profit growing at 45 pc

"The overall telecom macro picture still does not show clarity, although the worst seems to be behind us. HSS positioning going into the next year, however, looks pretty good," said Mr Arun Kumar, President and Managing Director.

NEW DELHI, April 14

THE telecom software developer, Hughes Software Systems (HSS), has announced a 27 per cent drop in its net profit for 2002-03, but projected a 40-45 per cent growth in profits for the current year.

Net profit for the year stood at Rs 37.9 crore, down from Rs 52.2 crore in the previous year. Net sales at Rs 220.4 crore were also lower than Rs 234.9 crore in 2001-02, company officials said here. The board of directors recommended a dividend of Rs 2 per share (subject to deduction of tax at source, if any) with a face value of Rs 5. In the fourth quarter of the year, HSS posted a net profit of Rs 13.8 crore, marginally higher than Rs 12.7 crore in the corresponding quarter in the previous year. Net sales were also better at Rs 63.7 crore as against Rs 58 crore.

HSS said its net profit would grow by 40-45 per cent and sales by 35-40 per cent in the current fiscal on the back of orders worth $32 million, mostly to be executed over this year, and further tightening of expenses. "The overall telecom macro picture still does not show clarity, although the worst seems to be behind us. HSS positioning going into the next year, however, looks pretty good," said Mr Arun Kumar, President and Managing Director.

Mr Kumar said the billing rates continued to be under pressure, but HSS would strive to boost profitability by controlling costs and improving productivity. "We have, for instance, lowered our spending on research and development to 10-11 per cent of our turnover as compared to 16-17 per cent in the past," Mr Kumar said.

The foray into the business process outsourcing (BPO) space and plans to start offering banking and financial services software would also help the company meet its targets of growth. The BPO business showed significant `acceleration' during the year and is expected to break even in the third quarter of this fiscal. It currently has around 200 people.

In the software services area, HSS achieved higher volumes from existing clients and revived old relations. It expected Lucent, which awarded a contract in February this year, to be one of its top five clients in the future, Mr Kumar said. The software product business of the company, however, declined by 18 per cent over the previous quarter, despite bagging orders from Avaya, Cisco and Fiberhome.

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Hughes Soft net down 27 pc — To pay Rs 2; sees profit growing at 45 pc