Currently, the scrip is trading at around Rs 1,500. What future does it hold? The scrip came down to Rs 670 in May.

For FY 2000, HFCL posed an earning per share of Rs 12. Therefore, it is currently commanding a price-earning multiple of over 120. In March 2000, the company offered a 10 per cent stake to Consolidated Press Holding of Australia, the holding company of Kerry Packer. The deal was for an offer 7.16 million shares at a price of Rs 1,450 each and it raised Rs 1,039 crore.

HFCL manufactures telecommunication equipment and is also involved software development. The infusion of Rs 700 crore by the investment of CPH would help reduce institutional loans of around Rs 300 crore and help fund future expansion.With this fund infusion, HFCL's turnover and net profits are expected to rise from Rs 590 crore and Rs 80 crore respectively during the current fiscal to Rs 1,550 crore and Rs 246 crore, respectively, in 2000-01, according to company sources. An anticipated rise in turnover by a little over two times seems somewhat ambitious.

But, take a look at the past. The turnover went up from Rs 188 crore in 1997-98 to Rs 399 crore in '98-99 and further to Rs 579 crore in '99-00. The stock price was low in May at Rs 700. But this was in tandem with the Sensex, which had fallen to 3800 levels.

Now try and fit into this the fact that the stock price went up from Rs 1,550 on its downslide in March back to Rs 2,200 on investment by the Australian firm. And, currently, the stock price is close to the price at which Kerry Packer took his 10 per cent stake in the company.

Surely, with strong liberalisation initiative, the Indian telecom sector will offer much opportunity to HFCL in the current fiscal. The firm derives major part of its income from turnkey projects. The absence of any strong competition is an added plus point.

In terms of shareholding pattern, the promoters hold 31 per cent, FIIs 16 per cent, corporate bodies 11 per cent, banks 17 per cent, Kerry Packer group 9.1 per cent. The public float is just 12.9 per cent. At one level, you should be cautious, as those who made entry at Rs 800 level in May could be tempted to book profit, if the market does not move up.

Since June 20 the stock price has been level at around Rs 1,600.

The current price appears to factor in the expected increase in turnover and net profit for FY 2001. In my view the scrip hold the potential to touch Rs 2,400 in a year's time.

But the downside risk to Rs 1,200 - Rs 1,300. Booking profit is a reasonable move at the current juncture.

You could always get in once again, after taking stock. Wait to see if the current IT momentum will take the stock to break Rs 1,650 levels.