Thursday, February 26, 2004
Anticipation of good future growth has seen sustained accumulation
of the stock by funds. The stock of Hughes Software was currently
trading higher by 3.51% at Rs 629.25, on volumes of over 1.1
lakh shares on BSE by 14:55 IST. The stock has so far moved
in the Rs 610-645 range on BSE.
Hughes Software has been on a sustained uptrend in anticipation
of good future prospects. From a recent low of Rs 553.50 on
18 February 2004, the stock has now risen 14% to Rs 629.25.
In the same period, the BSE Sensex lost 6.63% to 5,627.32.
Over a longer period, Hughes Software has risen nearly four-folds
(387%) from Rs 129.15 on 27 January 2003.
As per market talk, the recent rise in Hughes Software has
been on huge accumulation from ICICI Securities and Reliance
Mutual Fund. Both institutions are accumulating in anticipation
of good future prospects on the back of a strong order book.
The rise in orders has been due to the success of the company's
new solution, launched in the telecom vertical segment. Telecom
verticals contribute a major part of the revenue of Hughes
Software.
Early this month, Hughes Software had announced plans to
increase focus on the development of software solutions and
services for the telecom handset market. The company is developing
communication applications in the GSM and 3G arena on leading
mobile platforms such as Symbian, Windows CE and Linux.
For the third quarter ended 31 December 2003, the company
reported a massive 110% rise in net profit to Rs 23.9 crore
(Rs 11.4 crore) on a 67.45% increase in total income to Rs
98.8 crore (Rs 59 crore). On quarter-on-quarter basis, net
profit increased 41.4% from Rs 16.9 crore in SQ-2003. On the
current equity share capital of Rs 16.83 crore, earnings per
share (EPS), on an annualised basis, works out to Rs 56.8.
Incidentally, the 110% rise in net profit surpassed the estimates
of a poll conducted by capitalmarket.com. The poll had estimated
Hughes Software's net profit to be in the Rs 17.10 crore-Rs
19.40 crore range, a growth of 50% and 70%. In fact, the results
also surpassed Hughes Software's own guidance. The company
had estimated profits to grow 60-65% and sales to increase
by around 55-60%.
Following the impressive performance, Hughes Software has
now revised upwards its guidance for FY-2004. The company
has increased its profit guidance to 80%, from 60-70%. It
expects sales to grow in the range of 55-60%.
Hughes Software is engaged in the development of packaged
software. It provides share consultancy services and other
ancillary products and services to the telecommunications
industry. Hughes Software's continued focus on the telecom
software solutions domain has begun to reap dividends. Incidentally,
the company derives more than 53% of its revenues from the
wireless telecom segment. In order to de-risk its business
and create added 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 also diversifying its revenue streams and
eyeing a foray into the banking, financial services, insurance
(BFSI) arena.
Last updated :
March 26, 2004
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