Digital GlobalSoft found no accolades for meeting expectations and turning out improved profits on Tuesday.

In fact, the frontline software stock slumped 4.72% to Rs 485.25 by 10:15 IST. It had struck an early high of Rs 524, and its low so far was Rs 479. Over 800,000 Digital GlobalSoft shares were recorded as volumes on BSE so far.

The stock has now lost 21.2% in four sessions from Rs 616 on 7 May 2003. In the previous four sessions, the scrip had risen 18% from Rs 521.20 on 30 April 2003.

Digital GlobalSoft came out with results before market hours today. For the fourth quarter ended 31 March 2003, the company registered a 13% rise in net profit to Rs 30 crore compared to a net profit of Rs 26.6 crore in the corresponding period of the previous year. Revenues climbed 30% to Rs 121.47 crore (Rs 1.21 billion) from Rs 93.77 crore in MQ 2002.

On a sequential basis, net profit moved up 11% from Rs 27 crore and total revenues increased 12% from Rs 113.3 crore (Rs 1.13 billion). Net worth is also up at Rs 322.9 crore (Rs 3.22 billion) as on 31 March 2003 from Rs 306.9 crore (Rs 3.06 billion) as on 31 December 2002.

Both net profit and revenues meet capitalmarket.com expectations - an 8-15% rise in net profit to Rs 28.6-30.5 crore on net revenues of Rs 117.5-127 crore, up 25-35.5%.

For the full year ended 31 March 2003, the company recorded a growth in net profit of 14% to Rs 106.02 crore (Rs 92.67 crore) on a 27% increase in total revenues (including other income) to Rs 439.94 crore (Rs 345.25 crore). The business from HP grew by 9% and independent business increased 130% in FY 2003.

The company has recommended a 45% dividend for FY 2002-03.

During Q4, the company added 21 new customers (15 in services and 6 in the products business). Human resources strength increased by 68% to 2,490 people in FY 2002-03. The company also made an entry into new regions in the Middle East in FY 2002-03, including Kuwait, the UAE and Saudi Arabia.

Meanwhile, the outlook for the company in FY 2003-04 remains encouraging.

Analysts say, despite the seemingly pleasant results, the scrip has fallen today on account of concerns over billing rates, that they would be cut by as much as 10-18% for new contracts secured in FY 2003-04.

The company's denial that the parent Hewlett Packard's Indian subsidiary will be merged with Digital GlobalSoft also led to some amount of extra selling. The company also informed that following the global merger between Hewlett Packard and Compaq, the future business and operating structure of Digital Globalsoft is currently under consideration.

As per market talk, in the last few days, brokerages CL Securities, Kotak Securities, Jardine FLeming and DSP Merrill Lynch were actively selling on the counter.

Digital GlobalSoft, previously known as Digital Equipment (India), is a globally focused software development and services company. It has an independent charter for growth and functioning, and enjoys the unique advantage of having Hewlett-Packard Company, one of the leading IT companies in the world, as a major investor, customer and supporter.

Earlier, at the global level, there was a merger between Hewlett-Packard, Heloise Merger Corporation and Compaq Computer Corporation. A new entity called Hewlett-Packard Company took shape on 7 May 2002 in the US. Compaq Computer Corporation is the holding company of Compaq Computer Holdings UK, that owns 51% equity stake in Digital GlobalSoft.

BSE code: 500121