HCL Infosystems came out strong early on Friday as the company said its business improved due to burgeoning government orders.

The scrip of the Shiv Nadar group hardware company zoomed up 11.5% to Rs 94 by 10:00 IST, recording volumes of 15,047 shares on BSE by then.

After market hours Thursday, HCL Infosystems said that for Q3 ended 31 March 2003, it posted a massive 234% rise in net profit to Rs 34.35 crore on a 115% increase in total income to Rs 744.36 crore (Rs 7.44 billion).

The strong performance has been attributed to burgeoning orders from the government. In fact, the share of the government in HCL Infosystems' order book is over 60%! The company's office automation and telecom business also was vindicated by rising business from Finnish mobile phone giant Nokia.

The company has also been inspired by the the government's allowing 100% tax benefits to IT hardware for a period of three years in the Exim policy for 2003-04.

In another recent development, HCL Infosystems confirmed media reports that it received an order to automate value added tax services from the Andhra Pradesh government. The project, codenamed AP VASTIC (Value Added Sales Tax Information System), would be funded by DFID of the UK (a UK government-owned funding agency for governance projects) and the AP government and will involve the integration of various tax collection offices across the state with the main office in Hyderabad.

The project is estimated at Rs 16 crore and will run for three years. It involves the complete automation of VAT services across all the 21 circles in the state, replacing the old AP GST system with the interconnectivity facility to the main commercial tax department in Hyderabad.

However, a cause for concern for organised and branded PC makers like HCL Infosystems is that unorganised PC makers and grey markets are steadily eating into the market share of the organised sector, given the low pricing of the former.

BSE code: 500179