Of late the company's scrip has been hovering around the Rs 640 mark. Rumours pertaining to a bonus announcement had perked up the scrip by around 100 points just before its results for the half year ended September 30, 1998 were announced. Moreover, the market was disappointed by the 37 per cent growth in bottomline to Rs 43.14 crore. Furthermore for the period other software companies have posted higher growth figures.

Company sources specify that the employee strength of the company has grown from 1284 as on March 31, 1998 to 1836 (business software 920 and multimedia segment) as on30 September, 1998 a growth of 43 per cent. Commensurately, operating margins have marginally decreased by one per cent to 41 per cent. This low growth in margin was actually on account of the growth in the turnover and manpower.

For the period total revenues have risen by 69.51 per cent to Rs 214.14 crore. Of these the multimedia segment (2D/3D/special effects, CBT/CD titles and internet) accounted for 49.22 per cent whilst the business software segment (banking, insurance, ERP and Y2K) contributed 50.78 per cent. PSEL does not provide for tax as it comprises of a designated 100 per cent export oriented unit (EOU) under the Software Technology Park (STP) and Electronic Hardware Technology Park (EHTP) schemes.

Due to the changes adopted in the depreciation policy with computers being depreciated at an accelerated rate there has been a 130 per cent growth in depreciation from Rs 12.39 crore to Rs 28.53 crores. But other income as a percentage of PAT remains at a low 2.82 per cent from 1.04 percent.

Company sources confirm that PSEL has consciously reduced its exposure to Y2K projects. However, the company is executing Y2K projects in conjunction with IBM, BIG 5, EDS and Computer Associates. Year 2000 projects have contributed 11.5 per cent to the business software revenues. Considering the fact that PSEL targets the high-end markets for multimedia and business software, it should comfortably maintain a steady growth rate of 50 per cent over the next two years. The PSEL scrip should sustain its volatility and bullishness for some time to come.