16 CMC The Basket Approach

DQI Bureau
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company focused on economically viable projects and geographies, including the

global information technology market instead of taking up only social obligation

projects. It clocked a growth of 36% compared to 17% during 1998-99, closing its

book for the last fiscal with a revenue of Rs 470 crore. The company also posted

substantial growth in terms of profit after tax (PAT) and profit before tax (PBT)–76%

and 69%, respectively–while its value addition grew by 28%. Earning per share

too jumped from around Rs 5 to Rs 9. And while CMC has set a target of Rs 567

crore for fiscal 2000-01, it is working towards crossing the Rs 1,000-crore mark

by 2002.

  • To increase focus on embedded systems and ASIC

    design market
  • To proliferate high value-added services,

    facility management and ASPS
  • Growth through JVs and collaborations
  • To increase revenue share from international

  • To cross Rs 1,000-crore mark by 2002.
  • Achieved 36% growth
  • Consolidated position in packaged software and

    embedded systems area
  • Education and training business suffered due

    to stiff competition.


key factor for CMC’s growth was the company’s ability to focus on its wide

range of products. The company formed five strategic business units (SBUs)–customer

services, systems integration, international operations, indonet, and education

and training. Also, not content with its share in the global market, it went a

step further and created three separate marketing SBUs with their footprints

spreading across the Middle-East, southeast Asia and Europe.


services sector contributed the biggest chunk to the total revenue–Rs 313

crore or 67%. While the overall strategy of the company was to add value to its

services, it also laid much emphasis on facilities management. Third-party

maintenance continued as usual to remain the breadwinner for its customer

services SBU, with some of the major orders for the company coming from Indian

Railways, National Stock Exchange and ADA Bangalore. CMC’s strategy of

entering different vertical industrial segments also paid off well, with the

systems integrator SBU showing a remarkable growth of 64%. The last fiscal also

witnessed tremendous growth in new sectors of fingerprint analysis, insurance,

depository and freight management through its packaged software.

  • START-UP YEAR: 1976
  • PRODUCTS AND SERVICES: Systems integration, network integration,

    packaged software, maintenance services, IT training
  • EMPLOYEES: 2, 931
  • ADDRESS: 1Ring Road, Kilokri, Opposite Maharani Bagh, New Delhi 110

  • TEL: 6830 087, 683 7815
  • FAX: 684 4652

The company’s focus on systems integration and

implementation of its packaged software saw its international SBU consolidate

its market share. Another area where CMC continued to realize gains on its

previous year’s success was its marine cargo handling system (MACH). The

company bagged a major turnkey order from the Malaysian Port of Tanjung Pelepas

competing against 16 global vendors on an international tender.

Its major achievement, however, was a huge order for

electronic data interchange (EDI) that it bagged amidst stiff competition from

industry leaders like VSNL and Global Telesystems. The company also tied up with

nationalized banks to offer credit card services on its Indonet network, besides

helping the Election Commission of India process election results and developing

a website for Indian Railways. The company also forayed into new areas like

e-governance and ecommerce, which showed good promise, thanks to the new-found

love for these from several state governments.

Its education and training SBU, on the other hand, suffered a major jolt in

the face of stiff competition from leading players like NIIT, Aptech and SSI.

Though this was attributed more to the aggressive marketing strategies adopted

by its rivals rather than any lacunae in the quality of its products, the last

fiscal saw CMC’s revenue growth rate from education and training drop by 32%–from

57% during 1998-99 to 25% in the last fiscal. Also, a high number of franchisee

centers led to lower margins in this segment. DQ