A perusal of the unaudited financial results for the second quarter ended September 30, 1998 indicates that net sales increased by 27.19 per cent to Rs 103.26 crore. A major chunk comprising more than 70 per cent of its turnover is still contributed by software exports. Almost 45 per cent of its software export turnover is contributed by mainframes. Around 80 per cent of TIL's exports are through the Unisys Corporation. It may be recalled that Unisys had sold out its 40 per cent stake to the Tata group.

Operating profits have risen by awhopping 69.37 per cent to Rs 17.37 crore. Commensurately, operating margins have increased to 16.76 per cent from 12.58 per cent, thanks largely to a curb on onsite expenses. Owing to additional investments in infrastructure, depreciation expenses have risen by a sizeable 119.17 per cent to Rs 4.23 crore. Other income as a percentage of profit before tax continues to remain at a high of 21 per cent. All this has resulted in the bottomline soaring to Rs 12.85 crore from Rs 6.83 crore, which translates into an increase of 88.14 per cent.

The company has currently embarked on a direct marketing strategy for software exports to the US, Japan and Europe. This should gradually reduce its dependence on Unisys to market its product. Also, increased focus on its training business could spur growth in the future.

On the domestic front, the company has continued to make significant strides in the systems integration market - TIL won a SI contract involving supply of servers and nodes, networking and softwaredevelopment for the canteen stores depots of the Indian Navy. Other orders included a customised software development order from Jagatjit Industries, the sales, implementation, customisation and testing of a Management Information Systems (MIS) product for Maharashtra Small Industries Development Corporation (MSSIDC), implementation of BaaN solutions at Indo Asian Fusegear Ltd's Murthal plant and a campus-wide fibre networking order from Bhel-Bhopal. The company has also tied with US-based Porta Systems to provide Indian telecom companies with integrated solutions.

In the international market, the company has bagged multiple contracts from north central data cooperative (NCDC) which included application development for a general ledger system and central office equipment and continuing property record; Y-2K orders for Banco National de Costa Rica, a large bank in San Jose, Costa Rica and the School District of Philadelphia.

The TIL stock currently trades around the Rs 1400 mark. Analysts indicate that inthe future, TIL should reduce its exposure to Y2K based software exports as this line of business might peter out post year 2000.