CMC Q1 consolidated profit slips by 25%

IT solutions provider CMC on Monday posted a 24.89 per cent decline in its consolidated net profit at Rs 34.88 crore for the quarter ended June 30, 2011, on account of increased staff costs.

The Tata group firm had a net profit of Rs 46.44 crore in the same period previous fiscal.

"This quarter EBIDTA profit is same as last year, but we had some additional investments in hiring people that impacted our bottomline," said CMC CEO and MD R Ramanan.

CMC's staff costs rose to Rs 95.80 crore in the first quarter from Rs 76.64 crore in corresponding period last year.

The company's sub contracting and outsourcing costs increased to Rs 80.48 crore from Rs 61.31 crore in the same quarter last fiscal.

CMC's revenues rose to Rs 30.55 crore during Q1 FY'12 as against Rs 24.51 crore in the same period last year.

The company has earmarked a capex of Rs 246 crore for the fiscal.

"We have a SEZ in Hyderabad, which is undergoing construction in phases. This year, we will invest about Rs 200 crore towards SEZ in Hyderabad and Rs 4.5 crore towards SEZ in Kolkata and the remainder for other purposes,"said CMC Chief Financial Officer J K Gupta.

He also added that the company had spent Rs 29 crore as capital expenditure during the first quarter.

Once the SEZ is complete, it will have the capacity to seat 13,000 people, and 2,400 seats would be utilised by CMC and rest by Tata Consultancy Services, he said.