In the first half of 1999-2000, its revenues stood at Rs 182.63 crores, anincrease of 23 per cent over the same period last year. During the fourthquarter of 1999-2000, the turnover went up by 35 per cent to Rs 17.25 croreagainst Rs 12.76 crore. The net profit increased by 47 per cent to touch Rs4.55 crore, compared to Rs 3.18 crore in the previous year.

The net profit for 1999-00 is at Rs 12.89 crore as compared to Rs 7.3 crorein the previous year, a jump of 76.3 per cent.

The earning per share (EPS) has doubled to Rs 8.51 from Rs 4.82 in theprevious year. Despite the increase in the equity base by Rs 9 crores, theearning per share is expected to be over Rs 10 in the fiscal year 2001. Theincome from Baton Rogue International (BRI), based in the US went up to Rs550 crore in 1999-00. In the previous year, it had posted an income of $23million. Acquired by CMC in 1991, BRI is mainly engaged in developingbanking solutions. CMC Ltd took birth when IBM had to exit the country.

Formed to take over the maintenance of IBM machines, it soon spread itswings to software development. The Government holds 83 per cent of thecapital, which stands at Rs 15.1 crore. The company has been in the news onand off during the last one year in terms of government issuing additionalshares at a premium. The proposal was to issue 96 lakh new equity shares tothe public. The earlier proposal was to issue shares at Rs 800, charging apremium of Rs 400 over the then existing market price. Later, in an attemptto realise better value, it changed its stance to finding a strategicpartner. But since the markets entered a turbulent phase, all these planscame to nought. CMC had drafted a plan to mobilize keeping in mind it fundrequirements.

The initial requirement was put at Rs 197 crores - Rs 125 crores forvarious investment plans and Rs 72 crores for working capital needs. Therequirement in the next two years could be Rs 200-250 crores, includingworking capital needs. Post the equity issue, the government's holding couldcome down to 51 per cent. The money raised would be invested mainly todevelop and upgrade its infrastrucutre facilities. The company is targetinga steady growth of about 45 per cent in the three core areas of ITservices, IT education and system integration and turnkey solutionsbusiness.

Recently, CMC has bagged orders to provide complete facility managementsolution to several ports in India as well as in other developing countries.The company is also expecting significant orders from stock exchange inBangladesh and other South Asian countries. With a strong order bookposition, the topline is expected to grow at an impressive rate of over 35per cent during next couple of years.

For the year 1999-00, service oriented packages brought in Rs 255 crore,accounting for 56 per cent of revenues. Software related activities at Rs160 crore contributed to 35 per cent of revenue. CMC set up its IT educationand training wing in 1994 as a strategic business unit (SBU). It ranks thefifth largest IT education provider, and has own and joint centres operatingin different parts of the country. It also has a large number of domesticfranchisees and some in Bangladesh.There is scope for expanding itsfranchisee network further abroad. The software education industry canprovide growth upwards of 50 per cent.

In terms of infrastructure, it is equipped with IBM, VAX and NCR mainframes,Tandem-Cyclone, HP, Sun and Digital UNIX Minis and super minis, AS/400,PS/2, and Pentium. It has a software technology park and development centrelocated at Hyderabad with a dedicated 64 Kbp communication link andteleconferencing facilities.

Offices are located in all major Indin cities and over 100 servicelocations. It has a nationwide public data net work Indonet.

CMC's merit for the investor lies in its steady performance. The scrip hasdrifted from Rs 550 to Rs 300. At the current price, it is a good buy. Thedownside risk is limited supported by its fundamental performance. Theupside potential will be realised when the market revival takes place. So itis a very good choice considering the risk-reward position. One can expect areturn of 60 per cent in a year's time.