CMC eyes foreign shores for growth
Business Standard - June 18, 2005

CMC Limited, that ended the last financial year with revenues of Rs 782 crore, is looking at increasing its focus on the international markets. At present, international markets contribute to 18 per cent of the company's revenues. CMC is looking at increasing the contribution of international markets to its total revenues to 30 per cent.

This apart, CMC will also be increasing its headcount by 400 from the current 3,200 people. And with Tata Consultancy Services (TCS) taking a 51 per cent stake in CMC, both the companies will now be undertaking a 'joint go-to-market approach'. Addressing media persons after the 29th annual general meeting held in Hyderabad on Friday, S Mahalingam, chief financial officer of TCS, said that CMC will now have access to more number of international markets with the synergy with TCS.

"Over the last couple of years, we have been focusing on providing value-added solutions. We will now be positioning ourselves in the international markets where there is a need for such solutions. These include solutions in domains like biometric, core banking, insurance and stock exchanges," R Ramanan, managing director and chief executive officer of CMC Limited, said. "We will, therefore, become choosy in terms of government projects and focus on the private sector. For instance, in the insurance sector, we have bagged an order from a private insurance company and are in talks with another," he added.

In the public sector, CMC has clients like United India Insurance, National Insurance and New India Insurance. "Our synergy will help us bag those projects that each could not individually get as while CMC has strong domain expertise and technical skills in niche areas especially in the domestic government sector, TCS is strong in the international markets. There is, therefore, a flexible arrangement between the two of us and we will have a 'joint go-to-market approach'," he said, adding that merger between the two has not been discussed as yet.

In 2004-05, CMC had to make a provision of Rs 16 crore due to which the profits and topline of the company were affected. "There were two international projects that had to be suspended. These projects have, however, not been called off and we may accrue them in this year also," Ramanan said.