For the year ended June 1999, the company had earned Rs 73.78 crore by way of software exports. For the nine-months ended March 2000, software exports (now the company's only line of activity) yielded Rs 61.30 crore. On an annualised basis, this works out to Rs 81.73 crore, a meagre 10.78 per cent growth over that of the previous year. The company's net sales figure for the year ended June 1999 was Rs 248.83 crore as it included Rs 175.05 crore earned from its computer products & services business. This business was sold to Compaq Computer (India) for a total consideration of Rs 89 crore in June.

About Rs 78.55 crore from the proceeds of that sale were paid out to share holders as a generous one-time dividend of Rs 24 per share. Another Rs 8.64 crore was paid by the company as dividend tax. Yet, as the proceeds from the sale of the division were received in July and the company actually sent out the dividend warrants much later, it was able to post an other income of Rs 9.71 crore. Most of this income was earned from investing the surplus funds in short-term deposits. Other income for the year ended June 1999, was much lower at Rs 3.96 crore. Besides, the company has retired all its debts and did not incur any interest expenses for the year ended March 2000.

The company's non-annualised pre-tax profit was Rs 22.17 crore as compared with Rs 25.61 crore for the previous year. The annualised figure at Rs 29.56 crore is higher than the previous year's pre-tax profit. The company's net profit for the year ended June 1999 at Rs 54.33 crore, was almost double the annualised net profit for the year ended March 2000. This was the result of the Rs 41.97 crore pre-tax profit that the company recorded in the previous year against the sale of the computer products & services division.

Digital's low topline growth so far appears to suggest that the much larger orders from Compaq and its referrals, which were expected to materialise post Digital's restructuring, have not been forthcoming. Unless the company is able to improve its order book position substantially, its current year's performance may not be much to speak of.

Digital has now to prove its mettle and show its ability to procure software business apart from those from Compaq. Until that happens, the market will continue to keep the stock under a watch rating. The current price already partly refects this reassessment.

In the current turbulence that is blowing across bourses on software stocks, the investor should be on the look out for market rerating on each and every company tightly. Looked at it this way, it is difficult to say that Digital has seen the bottom yet!