Tuesday, September 03, 2002
After rallying sharply in the last few trading sessions,
the scrip of the telecom software major fell today on profit
taking. Hughes Software moved lower by 2.2% to Rs 170.05 on
BSE by the end of one half of trading. Around 3.78 lakh shares
changed hands on the counter on BSE. The scrip is
Rs 5 paid.
The scrip witnessed a spurt in volumes on BSE in the last
two trading sessions (Friday, 30 August 2002 and Monday, 2
September 2002) . Marketmen attribute the spurt in volumes
to buying by operators .
On Friday, the scrip clocked a volume of 38.5 lakh shares
on BSE boosted by a block deal. US-based FII Capital International
is rumoured to have sold a block of Hughes Software (HSS)
shares while operators bought these.
Earlier, sustained selling pressure saw the shares of the
beleaguered telecom software maker hit a lifetime (closing)
low of Rs 129.85 on 1 August 2002. The scrip has recovered
since, from that low.
The telecom software major has been hit by the current downturn
in the US telecom sector. For Q1 ended 30 June 2002, Hughes
Software registered a massive 76.5% fall in net profit to
Rs 4.4 crore compared to Rs 18.7 crore in the corresponding
period last year. Net sales decreased
25.3% to Rs 47.4 crore from Rs 63.4 crore in JQ 2001.
At the time of announcing its Q1 ended 30 June 2002 results,
the company's president and managing director Arun Kumar said,
"We expect a continued depression in telecom markets
during the current fiscal making future predictions very difficult."
To counter the difficult situation, the company has decided
to limit its research and development (R&D) spend on new
product development and shifted its focus to professional
services. In order to further de-risk its business and create
newer opportunities, Hughes Software has decided to enter
into the business process outsourcing (BPO) segment. This
will be started as an independent operation.
Hughes Software is a specialist in convergent network software,
and a leader in providing GPRS, UMTS as well as VoP software
to original equipment manufacturers (OEMs).
Last year, Hughes Software underwent change in parentage,
after General Motors entered into an agreement to sell Hughes
Electronics Corporation to EchoStar Communications Corp (HEC)
for $25.8 billion in cash and shares. HSS derives substantial
revenues from HEC. The management of HSS maintains that the
merger will not have any adverse impact on HSS' operations.
Last updated : February 2, 2004
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