Hughes bounces off low, to attract value buying

NEW DELHI: Shares of India's Hughes Software Systems Ltd. bounced off a low

of Rs 874 on Friday to trade 1.7 per cent down in line with a decline in the

tech sector. The low was just marginally above its year low of Rs 872 hit on

October 11 and some analysts said it was reaching levels likely to attract value

buying.

At 12:00 noon (0630 GMT), Hughes was quoted 1.66 per cent or Rs 15 lower at

Rs 889, while the 30-stock benchmark Bombay index was 0.6 per cent higher at

4,022.81 points.

"It's the sector thing...all tech stocks are suffering, but this makes

Hughes more attractive," said an analyst with a Mumbai-based foreign

research firm.

He forecast a 45 per cent rise in March 2001 net profits to Rs 550 million

($11.7 million) and a 56 per cent jump in net sales to Rs 1.67 billion.

Pranav Securities analyst Priya Rohira said however that the current sell-off

in the tech sector could drive Hughes shares as low as Rs 820 before staging a

recovery. But, she said the company had a strong underlying business with a

focus in the high-margin telecom software sector and a broad and rising client

base.

"High valuations were a concern, especially the product side, but the

second quarter has seen 12 of the 15 new clients going for their products...

that's acceptance," she added.

At Rs 889, Hughes is some 63 per cent below its all time high of Rs 2,424.13

struck on January 4. The company also had a two-for-one stock split this year.

(C) Reuters Limited 2000.