NEW DELHI, July 17: The spectacular growth in CMC Ltd's share price has been accompanied by huge orders for the public sector IT company, even as it is planning to bring down the debt-equity ratio to less than one, besides considering an employees stock option. While the scrip has risen by a whopping 1,020 per cent in less than seven months to Rs 112 from Rs 10 on January 13, 1997, orders are pouring into the public sector undertaking.

Says chairman-cum-managing director KK Krishna Kutty, ``We are going from strength to strength and have already achieved over 60 per cent of our turnover target for fiscal 1997-98. We are confident of surpassing the turnover target of Rs 280-300 crore this year.''

Although Kutty refused to divulge the exact order book position, he said the company had bagged a host of contracts including a major export order from the Chittagong Stock Exchange.CMC Ltd, which reported a positive operating profit in the last fiscal, hopes to double its net profit to Rs 8 crore from Rs 3.85 crore during 1996-97. The company recently bagged a contract for setting up networking facilities for the Steel Authority of India. Besides, it has been appointed as a consultant for setting up a V-SAT network for the Reserve Bank of India. According to Kutty, CMC is also actively involved with the computerisation of many public sector banks. ``TC 4, the banking software developed and re-engineered by our US subsidiary Baton Rouge International, has been very popular abroad.

With stand-alone bank automation now coming to India, the software (which can compile a balance-sheet twice daily) will add to our bottomline,'' adds Kutty. Last month, CMC also bagged two major orders from two German Ports for the supply of container handling software programmes. After the implementation of BOLT on the Mumbai Stock Exchange, CMC now plans to market its expertise in developing systems for paperless trading of scrips to south-east Asian markets and old East European block.On the bourses, CMC Ltd has been rising steadily. From Rs 10 in the beginning of the year, the scrip now trades at Rs 106. Although the floating stock is low (the government divested only 16.25 per cent of the total shares), volumes have been high.

The share price has been bouyed by the good performance of the company during 1996-97. If the other income component of Rs 29 crore is excluded, the company had a net loss in fiscal 1995-96. The actual turnaround, therefore, came only last year with a net profit of Rs 3.85 crore. According to Kutty, a substantial reduction in the debt-equity ratio form over 6.1 to 1.2 has helped the company reduce its interest burden. ``We hope to bring it down to less than 1 in the current fiscal,'' says Kutty. CMC also hopes to bring down its attrition level through the Employee Stock Option Plan. ``We are working on a stock-option proposal and will submit the same for approval soon,'' says Kutty.

CMC, which was essentially into maintenance of IBM mainframes, has now moved into providing networking solutions, equipment supply, software export as well as training and development. In tune with the changed business scenario, the company plans to consolidate its activities and has set up five strategic business units -- customer service, system integration, international operations, education and training and Indonet. Software export is a major thrust area and the company expects a 60 per cent growth in this area in the current fiscal. At present, software export contributes Rs 24-25 crore to the total turnover of the company.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.