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“Unique
business model” has helped the company in keeping itself unscathed
from the US slowdown and the same will protect the company’s
sales and profit this year Hughes Software Systems, which announced
its fourth quarter results last week, has claimed that the company
will retain the 61 per cent Compounded Annual Growth Rate (CAGR)
in its sales and outperform the 89 per cent CAGR in net profit in
financial year 2001-2002 (April-March). Supporting the claims, the
company top brass said that the “unique business model”
has helped the company in keeping itself unscathed from the US slowdown
and the same will protect the company’s sales and profit this
year. Moreover, the company does not see any major reduction in
billing rates as it caters to a very niche segment of telecommunication
software, they added.
Explaining
the business model, Manoranjan Mohapatra, chief operating officer
of Hughes Software, said that the company’s business is divided
into three segments: business from parent company, Hughes Network,
professional services and products.
“As far
as the parent’s business is concerned, we have almost 100 per
cent visibility of future business,” he said adding that the
professional services segment consists of only offshore projects
from the clients which are under a long-term contract, again giving
the company fair amount of business predictability. Moreover, the
feedback from our clients, which are primarily from the telecom
sector, indicates that they do not plan any cut in their research
& development efforts because of the slowdown, he added.
The company
is also in the telecom software product business and also sells
them under the royalty revenue model resulting into a recurring
income on the investments already made, said Mohapatra. Accordingly,
in the fourth quarter results ended March 31, 2001, parents business,
professional services and product business has contributed 36 per
cent, 30 per cent and 34 per cent of the total sales of the company
respectively. Hughes Software has reported a 100 per cent increase
in net profit to Rs 62.9 Crore for the year ended March 31, 2001,
against the last financial year net profit of Rs 31.5 Crore. The
total income of the company has gone up by 89 per cent to Rs 209.5
crore this year over the last financial year of Rs 110.7 crore.
For the quarter
ended March 31, 2001, the company reported Profit After Tax of Rs
22.1 crore, a 102 per cent increase over the corresponding quarter
last year of Rs 10.9 crore and Total Income of Rs 64.5 Crore, an
88 per cent increase over the corresponding quarter last year of
Rs 34.3 crore. The company has expanded its customer base by adding
15 new product customers in the last quarter. In addition, the company
entered into strategic/marketing tie-ups with Motorola, Nokia and
Sun Microsystems. Ericsson and ADC placed product orders with potential
for recurring revenues over the next few years.
From an operational
perspective, the company’s emphasis on product development
as an integral part of its growth strategy is succeeding, said Mohapatra
adding that product sales during the quarter grew at an impressive
rate of 77 per cent over the corresponding quarter last year resulting
in better operating margins for the company.
Microsoft,
NBC merge financial websites
Microsoft Corp and NBC said they were merging their financial Websites,
moneycentral and cnbc.com into a personal finance site expected
to be launched this summer. The financial terms of the deal weren’t
disclosed. Microsoft and General Electric Co’s NBC unit already
have a 50-50 partnership in MSNBC, a six-year-old cable news channel
and Website. The new site, CNBC moneycentral, will become part of
MSN, Microsoft’s family of online sites that also includes
Slate and Hotmail, company executives said at a press conference.
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