CMC to focus on opportunities in Europe, United States

TCS subsidiary expects to maintain margins at 15-17%

CMC Ltd, a Tata Consultancy Services subsidiary, on Tuesday said the company would focus on tapping business opportunities in Europe, the US and West Asian markets, owing to an expected increase in spending by clients in those markets.

“In Europe, especially in the UK, we surely see opportunities, and will be capitalising on those in the coming quarters,” R Ramanan, managing director and chief executive officer of CMC, told Business Standard. “We plan to tap the opportunities in this region through aggressive sales efforts.”

In the quarter ended December, 68 per cent of CMC’s revenues were accounted for by markets outside India. Currently, Americas is the largest market for the company, accounting for 59 per cent of its overall revenues. “We see international business doing better in the coming quarters. Since India accounts for 35 per cent of our total business, we will focus on maintaining the margin at 15-17 per cent,” Ramanan said.

For the quarter ended December 2013, CMC reported a consolidated net profit of Rs 70.54 crore, a 15 per cent rise compared to the year-ago period and a 4.8 per cent increase on a sequential basis. At Rs 560.92 crore, revenue rose 14 per cent year-on-year. During the December quarter, the systems integration and customer services verticals were the primary contributors to revenues.

Ramanan said the company felt there would be good traction in India in the coming months, especially from the systems integration and customer services verticals. “In percentage terms, America is the largest market for the systems integration and customer services segment and so, we see good opportunities for CMC in this market in the coming quarters, followed by Europe, West Asia and Africa.”

Though the Indian IT services industry is concerned about the US immigration Bill passed by the Senate in that country, which is awaiting approval by the US House of Representatives, CMC sees no significant impact of the Bill on its business. “We have local hiring at our US subsidiary. So, we do not see any significant impact of the Bill as far as CMC is concerned,” said Ramanan. “Our offshore business is quite independent.”

During the December quarter, the company added 14 new clients, 10 from the Indian market. The New Delhi-headquartered company plans to recruit 250 freshers this year. “Our hiring is a combination of contractual and regular employees, depending on the need for a particular project,” said Ramanan.

CMC currently operates out of 18 offices and 180 service locations in the country and employs over 10,000 people.