Hughes eyes significant growth from BPO

BANGALORE: Hughes Software Systems Ltd, the communications software company, expects revenues to grow 10 per cent in the current (fourth) quarter of fiscal 2002-03. "The company is expecting significant growth from the BPO segment and stable revenue stream from its parent Hughes Network Systems (HNS segment). We will be able to maintain our net profit margins," said Hughes Software managing director, Arun Kumar, on the company’s near-term prospects.

Kumar also announced the company’s plans to enter the BSFI segment in the near future at the conference call held today.

Hughes Soft`s receivables have declined to 108 days from 130 days. They stood at Rs 67 crore as on December 2002. It’s top 10 clients contributed 80 per cent to the turnover during the quarter to December 2002, while the top five contributed 58 per cent.

One of the company’s debtor, whose receivables were outstanding for more than 180 days, would be converted into equity. Hughes Soft plans to get Sebi’s nod in the next two to three weeks. Receivables position from debtors stood at $3.1 million. The company declined to disclose the name of the debtor, but said it would tell at the appropriate time.

In the professional services business, the OEM division makes for a lion’s share of Hughes Soft’s turnover. The TSP (Telecom Service Provider) division, which at present caters to four clients, contributed $1.2 million during the nine months ended December 2002. In future, the TSP division would contribute around 10 per cent to the turnover. The utilization rate is 89 per cent in the services business, excluding R&D employees.

BPO contribution is expected to accelerate in the next quarter. Employee strength, at 35 during Q3, is expected to rise to 150. The company has contracted DirecWay Product Line of Hughes Network for providing technical help desk.

Segment wise revenue break up for the Q3 ended December 2002 is as follows:

HNS services -- 18 percent

Non-HNS services -- 46 percent

Products -- 35 percent

BPO — 1 percent

Source: IRIS