CMC sees margins doubling

MUMBAI: Indian software and computer maintenance firm CMC Ltd., privatized by

the government last year, expects profit margins to double in the next financial

year on the back of new projects, a top official told Reuters.

CMC, acquired by the Tata group in October and run by Tata Consultancy

Services, India's top software exporter, expects margins to rise to 20 per cent

in 2002/03 (April-March), chief operating officer R. Ramanan said in an

interview on Wednesday.

He said sales would rise 25-30 per cent as CMC leveraged the global reach of

Tata Consultancy Services (TCS). TCS had revenues of over $689 million last

year, more than 60 per cent from North America and just nine per cent from

India.

"We see strong opportunities from outsourcing -- from companies in the

United States and from multinationals and domestic companies here," he

said. "We are also focusing on insurance companies establishing themselves

in India and on state-run organisations," he added.

Ramanan said CMC had started hiring aggressively this month, and would add

500 computer professionals and management graduates in a year's time, 250 of

them by May. CMC had a staff strength of 3,100 when the Tatas, India's

second-largest conglomerate by revenues, bought a controlling 51 per cent stake

from the government in October.

Since January, CMC had won five contracts -- including one in partnership

with TCS -- worth a total of some $32 million, which would boost its performance

in the financial year starting April 1, 2002, Ramanan said.