Removal of sanctions to benefits Tata Elxsi

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.