After CMC improved its margins by almost 124 bps (YoY) in its operational profit and about 170 bps (YoY) in its profit after tax (PAT), R Ramanan, MD & CEO of the company says they will be operating between 15 percent and 17 percent margins for the company.
“We have good momentum in the market place today and will continue to target these margins during the coming year,” he says in an interview to CNBC-TV18.
However, CMC's EBITDA (earnings before interest, taxes, depreciation and amortization) declined marginally to Rs 81 crore from about Rs 83 crore in the Oct-Dec quarter. Margins slipped to 15.6 percent from 16.8 percent.
Meanwhile, Ramanan says, the company targets to grow better than the industry standard. “Last year, we had a very good growth and have been able to add about 80 new clients during the year. We will keep the momentum of doing better than the industry standards,” he says.
Below is the verbatim transcript of R Ramanan’s interview on CNBC-TV18
Q: Can you take us through the margin picture and what the prognosis is going ahead? Can the company improve their margins further and what are the levers?
A: We had a very good growth during this year and have been able to improve our margins by almost 124 bps (YoY) in our operational profit and about 170 bps (YoY) in our profit after tax (PAT). We will be operating between 15 percent and 17 percent margins for the company. We have good momentum in the market place today and will continue to target these margins during the coming year.
We are also targeting to grow better than the industry and have grown by 31 percent year-on-year (YoY) in this particular year. During this quarter, we have grown by about 6 percent. So, we will try to maintain this momentum in the coming year too.
Q: On the revenue front will CMC continue to grow at that similar 30 percent run rate in FY14 as well?
A: Our target would be to grow better than the industry standard. Last year, we had a very good growth and have been able to add about 80 new clients. We will keep the momentum of doing better than the industry standards.
Q: Can you take us through the key vertical performance of CMC and the outlook for the same in FY14?
A: We generally do not give guidance for any of the verticals or for the company. However, we are on course in terms of the quality of business mix in the markets that they are addressing. We had a uniform growth in all the SBUs. Our key verticals are banking, financial services and insurance (BFSI) vertical, the energy resources and utility vertical as well as the high-tech vertical.
In India we are very strong in the government, and in energy geographies like Middle East and Africa, we also focus on the government project. These are the verticals and CMC has found a good traction during the last year and we have won clients in all these verticals and in the five SBUs that we are working.