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Digital India profits up by 16.95%

Revenues during the period went up by 12.49 per cent to Rs 1.4 billion as against Rs 1.24 billion during the corresponding period in the previous year.

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However, the company's profit before tax during the period fell by 8.24 per cent to Rs 133.7 million as compared to Rs 145.7 million posted during the same period last year.

The company's income from operations went up to Rs 1.39 billion from Rs 1.24 billion during the corresponding period last year.

According to analysts, DEIL has posted strong results when compared to the overall performance of the IT industry.

However, they added that its performance has not matched up to their expectations as the company has consistently outperformed the industry average.

"While a sales growth rate of 12 per cent is certainly not bad, DEIL is expected to post growth rates of about 20 per cent. But you can't blame them as the market conditions are very bad," said an analyst.

"If the company had not saved on taxes, the profits would have been much lower," he added. According to analysts, with competition in the PC market getting hot, coupled with reducing margins, the operating margins of the company were under pressure. "The operating margins will continue to be under pressure in the future also," an analyst said.

Backed by the news of Compaq acquiring Digital Equipment Corporation of the US (the parent company holds a 51 per cent stake in DEIL), the stock during the past couple of days has moved northwards on sustained buying by local speculators.

The scrip touched a high of Rs 153.95 on the NSE, which was the peak of the price band.

However, the not so impressive results announced by the company saw bears tightening their grip around the counter. The stock declined to touch a low of Rs 133.90 or the circuit price on the NSE where an outstanding sale order of 3,800 stocks was recorded.

Similarly, on the BSE, the stock was locked at the lower limit of Rs 132.25 with a sales outstanding position of 2,500 shares.

Earlier: Compaq's eaten Digital. Now how will the predator roam Indian jungles?

- Compiled from the Indian media

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