CMC shares up 4% on strong sales growth in Q3

Moneycontrol Bureau

Shares of IT solutions provider CMC rose over 4% on Monday morning, after the company's strong topline show in the third quarter. The company, which is a subsidiary of India's top software services exporter TCS, also saw its third quarter consolidated net profit rise 27% sequentially to Rs 41.4 crore, although down 9% from a year ago.

Consolidated revenue was up 45% year-on-year and 11% sequentially to Rs 396 crore in Oct-Dec.

CMC's net profit fell year-on-year as tax expenses more than doubled to Rs 17.09 crore in the third quarter. Profit before tax was up 10% from a year ago at Rs 58.46 crore.

"The company has built strong growth momentum in challenging business environment, with all geographies contributing to growth," R Ramanan, CEO and MD had said in a statement.

He told CNBC-TV18 that the company had managed to bring down its average effective tax rate to 29.2% in third quarter, from 38% in the last quarter and it will come down further in the course of the year as it leverages the facilities that it has now built.

CMC added 21 clients in the Oct-Dec quarter and net hired 1,474 employees over the three-month period.

At 10:40 hrs CMC shares were trading up 3.9% at Rs 954 on NSE.