Tata Infotech sees profit in 2000-01

MUMBAI: Indian computer systems integration, software and education firm Tata

Infotech Ltd., which made a net loss in the first quarter, will post a profit

for the full 2000-01 (April-March) year, its chairman said on Monday.

"The company is turning around. We do believe that we shall be

profitable this year," FK Kavarana told the annual shareholders' meeting.

He did not say how profitable the firm would be but said it would not touch

the Rs 472.2 million net profit made in 1998-99.

Tata Infotech's net profit for the year to March 31, 2000 slid to Rs 122

million while total income grew to Rs 4.32 billion from Rs 4.01 billion.

The firm posted a net loss of Rs 8.9 million in the current year's first

quarter ended June 30 compared to a profit of Rs 92.9 million in the year-ago

quarter.

Tata Infotech is part of the Tata Group, India's biggest business

conglomerate. The Group owns 73 per cent of its equity.

The company's shares ended down 2.0 percent or Rs 4.20 at Rs 197.95 on the

Bombay Stock Exchange on Monday while the main Bombay index finished up 0.97 per

cent at 4,232.51 points.

The stock is down 82 per cent from its early January peak of Rs 1,115.40.

Shareholders said it was perhaps the only information technology company in

the country to be posting a loss when others were growing robustly.

Kavarana said the criticism was justified and attributed the poor performance

to loss of business from a major client and error in the management's business

judgment.

"At a time when the information technology industry in our country is

growing exponentially and outpacing every other segment of the economy, Tata

Infotech has grossly under-performed both in terms of revenue growth and

profitability," he said.

"I do not wish to offer any excuses for this poor performance. There is

no question that the company completely misread the demand for services and

carried on recruiting and taking staff," Kavarana said.

"This caused a serious mismatch of demand and supply of services,

resulting in nearly a 1,000 software personnel being underemployed for most of

the year."

He said the firm had taken steps to reverse the situation and this had

resulted in the number of underemployed personnel declining to about 300.

The firm has also added 10 new clients in the first quarter, he said.

(C) Reuters Limited 2000.