CMC Q1 consolidated net up 44 %

Business Standard - July 14, 2007

Mumbai-based CMC, a Tata Consultancy Services (TCS) subsidiary, today reported a 44 per cent increase in its consolidated (unaudited) net profit at Rs 23.42 crore for the first quarter ended June 30, 2007, as compared to Rs 16.16 crore in the corresponding period of the previous financial year.

However, the company's total income declined by 4.48 per cent to Rs 240.75 crore from Rs 252.05 crore on a year-on-year basis this quarter. The stock closed the day at Rs 1,298.90, down by Rs 161.90 or 11.08 per cent.

When compared with the previous quarter's figures, CMC's net profit grew by 12.50 per cent from Rs 20.82. But the revenue was down by 17.14 per cent from Rs 290.57 crore.

In terms of segment-wise revenues, customer services (CS) saw a drop of 15.40 per cent to Rs 115.45 crore during the quarter compared to Rs 136.47 crore earned for the same quarter last financial year. But the systems
integration (SI) and information technology-enabled services (ITeS) segment revenues grew 5.40 per cent and 5.34 per cent respectively. Its education and training business unit grew 65 per cent and contributed Rs 10.52
crore for the quarter from Rs 6.36 crore.

CMC's international revenues were 40 per cent for this quarter. The company is looking at a mix of 45:55 mix from international and domestic market. The company said it will be working with TCS to get some high value-added services deal in the infrastructure space, government, defence, railways and transport projects.

Moving ahead, the company will be focusing on its education and training segment along with the SI and the CS businesses. This quarter saw a good growth in the education and training and SI and ITeS segment due to the change in the business focus. The company has moved away from its box-selling approach to providing value-added services to its customers. Though the revenues are down, the share of services have increased.