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CMC scrolls higher on new orders

March 06, 2003 15:28 IST

CMC was the subject of buying on Thursday as the company announced that it has bagged a number of projects worth Rs 100 crore (Rs 1 billion) including an international order from a Bahraini bank.

The announcement was enough to spur the scrip of the hardware and software maintenance and services company on, by 1.45% to Rs 540 by 9:56 IST. CMC recorded volumes of 2,246 shares on BSE by then. Yesterday the scrip ended higher by 7.4% to Rs 532.30. But holding on to the higher levels may not be likely today in view of the weak market conditions.

On Wednesday, the company said it has bagged significant orders in the current quarter estimated at over Rs 100 crore (Rs 1 billion). The company's new wins include an international project from the National Bank of Bahrain and sizable projects from domestic banking players including Andhra Bank, apex bank Reserve Bank of India and Bank of India. The company has also bagged a large project from the Government of Karnataka.

It was late last month that CMC had notified about its contract with National Bank of Bahrain, a front runner among banks in the Middle East, for the installation and implementation of the company's core banking solution - TC/4. CMC views this order as significant for its business in the Middle East marketplace.

In January 2003, CMC signed a multi-crore total branch automation order with Central Bank of India. The TAB order covered the automation of 300 branches across 36 cities and involved the installation of a range of IT equipment including state-of-the-art personal computers, servers and printers in each of the branches.

The company now plans to increase its focus on West Asia and the Asia Pacific markets.

CMC is involved in design, development and implementation of software technologies and applications. It also provides professional services for export and procurement, installation, commissioning, warranty and maintenance of imported and indigenous computer systems, education and training and networking services. For these activities, the company has different segments namely customer services, systems integration, Indonet, education and training.

The company also has a wholly-owned subsidiary, Baton Rouge International, in the US.

CMC has a large base of reputed clients in verticals like transportation, and a large share of the domestic market with work done for the Indian government in Railways. CMC has over 32,000 consultants. CMC also has a joint marketing strategy with Tata group software giant Tata Consultancy Services.

For Q3 ended 31 December 2002, CMC registered a 21% rise in sales to Rs 139.07 crore (1.39 billion). Net profit surged 45% to Rs 10.14 crore. Operating margins more than doubled during the quarter.

The customer services and systems integration business unit of CMC received some significant orders in Q3 in the areas of IT infrastructure management, call centre operation in telecom etc.

Going forward, CMC wants to leverage its association with Tata Consultancy Services. It has already started executing some new projects teaming up with the latter in the North American and Indian markets. On the back of this relationship, the company has given a guidance of sales growth of around 25% to 30% and improvement in margins by around 30% for the year ending 31 March 2003.

However, CMC's education and training business has been going through a rough patch in keeping with the general industry trend.

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