The Hindu Business Line : Hughes BPO unit sees good traction

THE business process arm of Hughes Software is likely to break even this financial year, top company officials said over the earnings call. The company had tripped on the earlier forecast of break-even timeline for 2003-04.

The BPO division currently serves only one client. However, the company management sees a "significant" traction from prospects and a healthy pipeline for the BPO business. The division is likely to expand its sole client relationship with parent HNS DirecWay as well as seek business from non-Hughes business, company officials said.

Hughes expects to expand its relationships with its nine existing tier-I telecom clients and is currently in "advanced talks" to add two such similar customers in the near-term. Hughes Software also expects good traction from its existing clients such as Lucent, Alcatel, Nokia and NEC in the telecom infrastructure segment whereas business volume in the enhanced services space is also likely to increase. The utilisation level for the IT services by the end of the fourth quarter of 2003-04 was 94 per cent.

Though business from parent HNS grew 14 per cent over the year in 2003-04, during the March quarter, it declined 15.5 per cent sequentially. Product business grew 14.9 per cent sequentially on higher license sales and royalties.

Though the company reported foreign exchange translation loss of Rs. 2.56 crore tracking a hardening rupee against the dollar, Hughes has hedged $7.5 million in receivables.