In fact, net profit at Rs 41.06 crore for the nine months ended December 1998 had already eclipsed the earnings of Rs 40.17 crore for the full 12 months ended March 1998. Interestingly, this earnings growth has been achieved despite a higher net interest charge of Rs 31.44 crore and a higher depreciation provision at Rs 25.62 crore for the 12 months ended March 1999. Company sources stated that the depreciation for the period underreview was up 61.23 per cent, due to higher capital expenditure and the acquisition of fixed assets to support the ongoing expansion plans of the company.

An increase in secured debt and higher working capital to fund the increase in sales and capital expenditure has also resulted in A buoyant net interest charge of Rs 31.44 crore (Rs 24.17 crore last year). How then has Global Telesystems managed to post strong earnings growth?

The buoyant bottomline, has largely been due to the company's shift in the sales mix to higher margin software solutions and services. In fact, net sales for the 12 months ended March 1999 stood at Rs 535.01 crore, an increase of 12.61 per cent compared to Rs 475.12 crore last year. This revenue growth, state analysts, is largely due to the company's focus on services, which deal with the important avenues of telecom engineering and software customisation. Moreover, a strong growth in export revenues, which have improved by over 50 per cent, did help. Furthermore, stringent costcontrol has also helped buoy margins at the operational level from 17.54 per cent to 23.06 per cent.

For the future, GTL earnings should be buoyed by the execution of the I-Trade CommNet (which aims to establish an electronic exchange medium for information and documents) and logistics tracking system projects apart from the in-house development of software on a turnkey basis. GTL is also poised to ride the e-commerce revolution, thanks to in-house software development. The company has also invested for growth in ERP solutions and rapid extensions in the emerging markets of supply chain management and sales automation solutions.

But perhaps most important from a long-term perspective would be GTL's new focus to globalise its operations. What with offices already set up in Singapore, Mauritius and the Middle East, GTL plans to leverage the existing relationship with India-based multinationals to attract their international parents. Thus, with a clientele reading like a virtual directory of corporate India,GTL appears to be batting on a firm wicket. However, in the interim, it could be the business from private telecom providers like Hughes that hold the key to GTL's profitabilities.