CMC held a conference call to discuss third quarter financials for FY09 and future prospects. R. Ramanan, Managing Director, CMC and CEO and J. K. Gupta, CFO, CMC addressed the call.
Highlights of the call
- For the quarter ended December 2008, on consolidated basis, on y-o-y basis, CMC reported 26% dip in income from operations at Rs 216.37 crore with OPM up 620bps at 16.7%. Other Income for the quarter was up 91% at Rs 93 lakh, interest cost was at Rs 27 lakh and depreciation charge was up 19% at Rs 2.42 crore. Tax charge for the quarter was down 7% at Rs 7.33 crore and the resultant PAT was up 23% at Rs 26.96 crore.
- For the quarter, on consolidated basis, Customer Services segment revenues dipped 61% at Rs 66.50 crore contributing 31% of revenues with PBIT margins improving 30bps at 6.5%.
- For the quarter, on consolidated basis, System Integration segment revenues grew 18% at Rs 115.28 crore contributing 54% of revenues with PBIT margins improving 280bps at 28.2%.
- For the quarter, on consolidated basis, ITES segment revenues grew 26% at Rs 17.73 crore contributing 8% of revenues with PBIT margins improving 670bps at 17.1%.
- For the quarter, on consolidated basis, Education & training segment revenues grew 19% at Rs 12.46 crore contributing 6% of revenues with PBIT margins down 390bps at 19.2%.
- Services revenues grew 3% sequentially contributing 86% of the revenues.
- Equipment sales for the quarter were at Rs 30 crore against Rs 28.04 crore in the sequential quarter and down 76% against the corresponding quarter previous year in line with company strategy.
- International business had revenues of Rs 100 crore for the quarter. In percentage terms, International revenues were 46.6% of revenues up from 45.1% in Q2FY09 and 31.2% in Q3FY08. International revenues grew 7% q-o-q and 8% on y-o-y basis. For 9MFY09 international business contribution was 39.5% against 35.2% in the corresponding period previous year. The company is focusing on US, Europe, Middle East & Asia and Africa
- CMC America Inc. reported revenues of US$ 13.9 million.
- CMC added 14 clients in the quarter with 3 in US and 11 in India.
- Forex gain booked in operating income were Rs 2.24 crore and rental income was Rs 1.51 crore.
- The company would be CMMI level 5 in FY2010.
- The company added 230 people during the quarter for both on-rolls as well as contractors. The total strength is 5409 employees with 3637 employees on rolls and 1772 on contract.
- Cash & Cash equivalents stood at Rs 108 crore and debt was Rs 32 crore. The debt is mainly for SEZ facility to come up in Hyderabad. The capex for 9MFY09 was Rs 20 crore. The company has plans to invest about Rs 40 crore on Phase I.
- The company is seeing thrust on Education & Training segment from specific industry verticals mainly Insurance and other job oriented courses. For India, the growth drivers would be government Projects like the “Passport Seva”. Also there is scope in Defense, Insurance, Ports and Security & Surveillance.
- The management is targeting PBT margins in the range of 12-15% on a consistent basis. It has achieved it in this quarter.
- Effective tax rate for FY09 would be 20-22%. For Q3FY09, the effective tax rate was 21.4%.