Hughes Software jumped 4.52% to Rs 159.49 in early trades on Monday on reports that some private equity funds are eyeing a stake in the company's equity.

The news set off buying in the scrip that has been snubbed over the past seven sessions - between 4 and 14 February 2003, the scrip lost 7.8% to Rs 152.50 from Rs 165.40. Volumes were modest today, though, at 13,121 shares on BSE by 9:57 IST.

It is reported that Hughes Software Systems is already in negotiations with the concerned funds, including the US-based General Atlantic Partner.

As on 31 December 2002, promoters held 55.57% stake in HSS, while the public, institutions and foreign bodies held 15.74%, 3.99% and 13.32 %, respectively.

Recently, HSS announced an alliance with QNX Software Systems to offer integrated solutions in the telecom market. The partnership brings together QNX's technology with HSS' protocol stacks for convergent networks, together offering integrated solutions to the Original Equipment Manufacturers in the telecom space.

There has also been much talk in the market that the company is at an advanced stage of bagging an order from Lucent Technologies for an outsourcing contract, likely to generate revenues of about $10 million over three years. Confirmation of this is yet awaited.

For the third quarter ended 31 December 2002, HSS registered a 21.3% fall in net profit to Rs 11.40 crore. Total income declined by 6.2% to Rs 59 crore.

At the time of announcing the Q3 results, Hughes Software's management said the company's sales may record a 10% sequential growth in Q4 ending 31 March 2003 from Q3 ended December 2002, but the next four quarters will continue to be difficult for the telecom sector.

The company, which derives revenues from the telecom domain, has been feeling the pinch of the sluggishness in the telecom sector globally. While the management gave a guidance of 10% sequential growth in revenues for the fourth quarter, it did not give guidance on profitability.

In order to de-risk its business and create added opportunities, HSSL has decided to enter into the business process outsourcing segment. This will be started as an independent operation. HSSL is also diversifying its revenue streams and is working currently for a foray into the banking, financial services, insurance segment.

Hughes Software is a subsidiary of HNS, formerly a unit of Hughes Electronics Corporation. HNS is a networking company, dedicated to providing products and services to build and operate digital communication networks worldwide. HNS is the world leader in VSAT-based networks for voice and data, cellular wireless telephony, packet switching and multi-protocol routing. HE is a world leader in the design, manufacture and marketing of advanced electronic systems. It was a wholly-owned subsidiary of General Motors Corporation, US. HNS-India Inc. is the principal shareholder in Hughes Software.