Monday, October 13, 2003
Products business rakes in revenues
Hughes Software Services (HSS) posted results in line with
market expectations. Sales grew 11 per cent while net profit
rose 11.8 per cent sequentially. Operating margins and net
margins remained at 25.29 per cent and 20 per cent respectively,
close to that in the previous quarter ended June 30, 2003,
but significantly higher than the September quarter last year.
Most of the incremental revenues have come from its products
business which is prone to volatility, hence its sustenance
is questionable.
* Revenues from products have been a major contributor to
sales which increased 51 per cent sequentially, after two
consecutive quarters of declines.
* Revenues from the parent company declined 4.9 per cent while that from the HSS business
grew 92 per cent compared to the previous quarter, which is
a healthy sign, according to analysts.
* The business process outsourcing (BPO) unit of HSS posted
a flat growth of 2.2 per cent while other companies posted
impressive double-digitgrowth.
* The company's telecom revenues posted a 11.65 per cent
growth compared to the first quarter of FY03 and is expected
to drive revenues further with the global telecom scenario
looking up.
* HSS has revised its earnings guidance to 80 per cent, up
around 20 per cent for a y-o-y growth while maintaining the
same guidance for sales growth at 55-60 per cent.
Analysts expect better performance from HSS. "The guidance
now given looks very achievable," says an IT analyst
with a domestic research house. On the price front, however,
analysts feel the stock has already priced in much of the
improvement in performance and upsides can be limited. The
scrip closed at Rs 394 on the bourses on Friday, up 2.3 per
cent from its previous close.
Last updated : October 28, 2004
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