HTMT Reports FY-2004 Unaudited Financial Results

Annual Income risen by 42% to Rs. 162.48 Crores
Net Profit up 22% to Rs. 75.62 Crores

Total income for Q4 increased by 27%

Thursday, April 29, 2004 : Hinduja TMT today reported a total income of Rs. 162.48 crores for the financial year ended 31st March 2004 compared to Rs. 114.47 crores for the year ended 31st March 2003, an increase of 42%. The net profit grew by 22% from Rs. 62.03 crores to Rs. 75.62 crores. The ratio of net profit to total income at 46% is in accordance with guidance given.

The earning per share increased by 22% to Rs. 18.49 per share from Rs.15.16 per share in the previous year.

While the total income for the quarter ended March 04 rose by 27% to Rs. 40.79 crores, the net profit was at Rs. 15.54 crores, compared to Rs. 15.50 crores for the quarter ended March 03. The ramp up and training of staff and creation of additional infrastructure facilities during the quarter to meet the significant growth in business expected in 2004-05 led to increase in overall-cost which resulted in net profit not rising in tandem with total income.

The execution of new orders for which pilots have been successfully completed and increase in business from existing clients will ensure growth in profits during 2004-05.

HTMT's robust business model focusing on ITES-BPO services backed by IT services has resulted in the Company posting a 3-year Compounded Average Growth Rate (CAGR) of 56.4% for its IT income.

The Company continued to be debt free as on 31st March 2004 and has a book value of Rs. 113/- per share.

"Our results for 2003-04 represent continued progress across a number of key operational fronts and were driven by improved profits in the BPO segment of business" said Mr. S. Solomon Raj, Vice Chairman, HTMT.

Operational Performance
During the year, HTMT was successful in expanding its customer base in ITES-BPO business by adding four more clients. While its main operations continue to be executed in Bangalore, it has opened a Disaster Recovery Center at Mumbai for its large health care insurance customer from US

Broad technical coverage, realisation of improved service metrics and product-specific expertise, especially in the health service line helped HTMT bag a 3-year BPO contract from another large US health insurance company. The contract, which commenced in Jan 2004, has already been ramped up to over 100 agents handling 3 processes for both Voice and Data.

The Company's first client in the healthcare space continued to increase the business significantly and the number of processors has gone up to 700 from 400 during the last 12 months. The number of claims handled per month also increased from 1.6 million to approx. 2.2 million in March 2004. HTMT is in the process of setting up a high-end Call Center employing Medical Doctors for the client.

HTMT also capitalised on its telecom domain experience and signed up with new clients for new call centre businesses. A new call centre order from a US based broadband service provider client which started in Aug 2003 with 100 CSRs has been ramped up to over 300 CSRs as on date.

In the IT Services space, HTMT leveraged its vast automobile domain expertise and expanded its market by bagging an ERP order for US$ 2.19 million (Rs. 10 crores) from a large automobile manufacturing company based in the Middle East.

Infrastructure
During the year, HTMT expanded its seat capacity by taking additional floor space at 'HTMT Center' admeasuring 80,000 sq. ft. with 1400-seat capacity at Bangalore. Thus, with the existing capacity at 'HTMT House', the total capacity increased from 1050 seats to 2450 seats occupying 132,000 sq. feet area.

Business in Philippines
With the remittance of US$ 3.9 million, acquisition of controlling interest in the Call Center Company, C3, Manila with 930 seats and blue-chip clients is in the process of completion.

At the request of one of HTMT's telecom clients, a portion of their Call Center business is now being executed by HTMT at Philippines in partnership with a local company, as a business derisking policy.

Consolidated results of HTMT and its Subsidiaries
The consolidated revenues increased by 33% from Rs. 216.78 crores last year to Rs. 288.49 crores. The consolidated net profit for the year ended 31st March 04 at Rs. 86.45 crores represents an increase of 48% over the previous year's net profit of Rs. 58.32 crores.