Financial Daily from THE HINDU group of publications
Friday, Feb 22, 2002
Blue Star Infotech in the limelight
MUMBAI, Feb. 21
THE Blue Star Infotech Ltd (BSIL) stock has been rising steadily in the last two weeks on expectations of a rise in net profit for the current fiscal.
During the week, the share price of the company has risen from Rs 80 to Thursday's closing price of Rs 104.95, an increase of 31 per cent.
Analysts expect the net profit of the company to rise by over 100 per cent to around Rs 13-13.5 crore for the financial year ending March 2002 (12 months), compared to the net profit of Rs 6.32 crore for 2000-01 (nine months). Total revenues are expected to be around Rs 60 crore (Rs 36.38 crore), including its two subsidiaries Blue Star Infotech America Inc and Blue Star Infotech (UK). For the nine-month period ended December 2001, net profit increased to Rs 9.85 crore against Rs 6.24 crore in the corresponding period last year while sales increased from Rs 39.66 crore to Rs 43.54 crore.
The rise in net profits was mainly on expectation of firms migrating from Hewlett Packard (HP) 3000 platform to HP 9000 a major growth area for the company, analysts said.
In India only, Tata Consultancy Services (TCS) and BSIL are known for providing this kind of services.
The BSIL General Manager (Finance and Accounts), Mr Hemant Kamath, told Business Line: ``Corporates moving from HP 3K to HP 9K platform provide good business opportunity for the company.''
He said business from HP contributed around 30-35 per cent of the total revenues.
The Refco-Sify Securities Head of Research, Mr Nikunj Doshi, said: ``BSIL's ability to leverage client relationships has provided a major growth for its business application practices (BAP), which accounts for a major portion of its revenues.'' The company develops software for HP in this segment.
Of the total revenue of Rs 43.5 crore for the nine-month period ended December 2001, BAP accounted for 43 per cent. Global R&D contributed 37 per cent and professional services 20 per cent.
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