Target to grow ahead of the IT industry: CMC
CMC's first quarter consolidated net profit declined 9 percent to Rs 53 crore on higher tax outgo and revenue was up 8 percent to Rs 486 crore.
July 24, 2013 / 13:35 IST
Moneycontrol Bureau
Software services exporter CMC continues to target growth ahead of the overall IT industry, with transport and insurance verticals among the key drivers, JK Gupta, CFO, said on Tuesday.Industry NASSCOM has forecast the sector's US Dollar revenue growth in 12-14 percent range for FY14. Speaking with moneycontrol.com, Gupta said the company expects to grow faster than that in the current financial year.CMC, a subsidiary of India's largest IT services exporter Tata Consultancy Services, late Monday reported a consolidated net profit of Rs 53 crore in the first quarter, down 9 percent year-on-year. The company's earnings were impacted by the Rs 9.6 crore tax it paid on the USD 10 million dividend received from its subsidiary CMC Americas. Its total tax expenses in April-June surged 65 percent year-on-year to Rs 28 crore.CMC's profit before tax was up 7 percent to Rs 81 crore.Quarterly net sales gained 8 percent to Rs 486 crore.Foreign exchange gains boosted the company's topline by Rs 14 crore, he said."We are reasonably happy with the quarter performance. Despite the difficult market conditions, we maintained our EBITDA margin. Our EBITDA margin was at 15.3 percent in Q1, compared with 15.4 percent in the Jan-March quarter," Gupta said.Software services companies have been impacted by clients going slow on decision making and cutting discretionary spends amid the global economic slowdown in the last one year. He said that there had no major change in the overall demand scenario in the last quarter. CMC's revenue from value-added services and solutions grew 5 percent quarter-on-quarter, Gupta said. International business was up 9 percent and its key North American market grew 5 percent in US Dollar terms, he added.Last week, India's second largest IT company Infosys reported better-than-expected earnings for the first quarter. Its CFO, Rajiv Bansal had told moneycontrol.com that the company was confident of meeting its full year US dollar revenue growth guidance of 6-10 percent. CMC shares were down 3 percent at Rs 1,313.15 on NSE in afternoon trade.Nachiket Kelkar
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