Digital net up 9.4%, meets forecast

BOMBAY:Software services firm Digital GlobalSoft Ltd, a subsidiary of Hewlett-Packard said that its quarterly net profit rose 9.4 percent from a year earlier, in line with analyst forecasts.

The Bangalore-based company, which earns most of its revenue from providing software services to its parent, reported a net profit of 302 million rupees in the fiscal first quarter ended June 30.

That compared with a reported net profit of 276 million rupees in the year-ago period.

It said net sales was 1.35 billion rupees, up 140 percent from the reported 961 million rupees a year ago.

A Reuters poll had forecast the firm to post a net profit of 300 million rupees on revenue of 1.31 billion rupees for the quarter.

Digital, 50.6 percent owned by HP is merging with HP Services India Software Organisation, a division of a fully-owned subsidiary of HP. As a result, HP's share in the company will rise to a little over 76 percent eventually.

Digital, India's twelveth-largest software services exporter, expects to see a steady stream of business from its parent over the next four years as HP has signed an agreement making Digital a preferred service provider.

Digital's shares have been on a roller-coaster ride in the past quarter following uncertainties over the impact of the merger on it earnings. They have lost nearly 26 percent in April-June, double the losses of the benchmark Bombay Stock Exchange Information Technology index.

© Reuters