BANGALORE: Tata Elxsi Ltd., the technical computing arm of the Tata group, is
likely to benefit from the removal of sanctions by the US government, which was
imposed during May 1998. According to Machukar Dev, vice president marketing,
the removal of sanctions will help the company revive its strong presence in the
education and research segments, which accounts for 35 per cent of Tata Elxsi's
overall revenue. However, with the imposition of sanctions, the company was
forced to opt out of the business and make do with maintenance contracts.
This initiative will however help the company regain its business from these
segments, which was drastically affected after the sanctions were imposed in
1998. Commenting further Madhukar said: "We are still waiting for some
clarifications. The removal of the sanctions is likely to be in the company's
favor as we are poised to tap the potential in the market which offers a large
unfulfilled demand."
According to him, the removal of sanctions will also help Tata Elxsi to
explore opportunities supplying equipment and maintenance of the same. Moving in
this direction, the company targets to regain 100 per cent revenue from the
education and research segments, entities that largely falls under the
government sector. Reportedly, the company has strategic alliance with 15
principles in the US and competes with resellers of Sun Microsystems and IBM in
the same space.
Madhukar also slated the companies projected target revenue of about 7
million dollar generated out of these segments. For the year ended March 31
2001, sales from this division accounted for only 5.6 per cent of the company's
total revenues at Rs 7.80 crore. The division is also planning to tap
opportunities arising in the areas of bio-technology, life sciences and
GIS/image processing. Tata Elxsi is also planning to diversify in the domestic
market by augmenting product offerings in the electronic design space within the
next few months.