CMC Ltd, a mid-sized Rs 708 crore IT solutions company has announced its results for the quarter ended December 2010. Its consolidated sales have risen by 29% to Rs 274 crore, over the same quarter last year. Its net profit has risen by 25% in this period.
CMC’s international business is a bigger contributor to growth, rising by 35% over the same quarter last year. Its domestic business has grown by 23%, healthy but lower than the international business growth, over the same time period. The international business is more profitable relative to the domestic one, which augurs well for profit growth.
Its cost of materials has reduced considerably, by Rs 30 crore, compared to the same period last year, though depreciation has gone up by Rs 20 crore. The company’s operating profit has risen by 18% to Rs 49 crore.
CMC benefits from Tata Consultancy Services owning a 51% stake in the company. TCS plays a major role in shoring up the expertise as well as strategy formulation, being a top-tier IT services company. The net profit margin of CMC has gone up from below 5% in 2001, when TCS took over, to 17% at present.
Focus on the global business features in the current agenda of the company. Overseas, the company has a branch office in Dubai, CMC Informatics, a trading branch office in the UK and CMC Americas, Inc., a wholly-owned subsidiary in USA.
CMC’s share price was down by 1.8% to Rs 2466 at the time of posting.