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Vishwanath Kulkarni

BANGALORE, Jan. 24

TATA Elxsi Ltd, the technical computing arm of the Tata Group has charted a new strategy aiming to grow at 100 per cent in exports next financial year. The company has forayed into overseas market for the high-margins multimedia services, while consolidating itself in the e-design space and is consciously exiting the low-end-low-cost hardware business, the newly-appointed CEO of the company, Mr Madhukar Dev, said.

For the current year, the company expects an overall growth of 15 per cent with a 30 per cent increase in exports, he said. It reported a net profit of Rs 13.86 crore last fiscal. The company has set up a design centre at Technopark, Thiruvananthapuram with an investment of Rs 10 crore, which is expected to be operational soon. It intends to add some 60 design engineers to the existing team of 150 professionals to carry out design and development activities, which includes systems development, embedded solutions and VLSI design, visual and scientific computing. The company expects nearly 50 per cent of its revenues from the overseas operations to come form the design and development operations.

As part of its foray into newer areas, Tata Elxsi has set up a media services group, which will focus on DSP and multimedia services. Through this new group, the company intends to tap the overseas multimedia market, which is a high margin business, he said. "The sheer size of the overseas market, estimated to be in the region of $15-20 billion has forced us to look at this space,'' Mr Dev said adding that the company had strengthened its multimedia team by empanelling some 80 professionals.

The company expects the new division to contribute a revenue of $ 10 million in the next financial year. Tata Elxsi is also bullish on its film and video business as the domestic film market is looking up with the increase in usage of graphics and special effects, he said. The low-end hardware business has been a drag on the company's bottomline.

"We have consciously decided to keep away from this business and are exiting this space because of the low margins,'' Mr Dev said. The low-cost box business accounted for some 25 per cent of the hardware revenues, which in turn account for nearly 20 per cent of the company's domestic revenues. However, "We would continue to import hi-end machines,'' he added. The company has restructured its marketing set up by separating the domestic and global marketing team.

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