The Hindu Business Line : CMC to beef up overseas biz with TCS help

Mr S. Ramadorai (third from right), Chairman, CMC Ltd, and Managing Director, Tata Consultancy Services; Mr R. Ramanan (second from right), Managing Director and Chief Executive Officer, CMC Ltd; Mr S. Mahalingam (left), Chief Financial Officer, TCS; and Mr J.K.Gupta, CFO, CMC Ltd, at a press conference in Hyderabad on Monday. - - A. Roy Chowdhury

Hyderabad , Aug. 30

CMC Ltd, a Tata group company, has drawn up plans to consolidate its overseas business leveraging Tata Consultancy Services Ltd's (TCS) strengths, even as the boards of both CMC and TCS, may consider the possibility of merger of the two in due course.

Addressing a press conference after the company's annual general meeting, the Chairman of CMC and Managing Director of TCS, Mr S. Ramadorai, the Managing Director of CMC, Mr R. Ramanan, and the Chief Financial Officer of TCS, Mr S. Mahalingam, and the CFO of CMC, Mr J. K. Gupta, said, "CMC has a significant domestic business, which was about 82 per cent last year, and the rest was from overseas market. The challenge is to convert the ability to agility."

"We have now embarked on the process to transform the company and grow the overseas business. From about 18 per cent, it has grown to about 27 per cent in the first quarter. This was possible because of the group synergies," they explained.

On the possible merger of CMC with TCS, Mr Ramadorai said, "There is no agenda to merge. TCS and CMC have independent boards and they would decide as to what is good for the shareholders. And when will this happen - it is difficult to comment about, as it depends on what the company boards decide to do. However, both the companies have evolved a strategy to leverage each other's capabilities and consolidate them both in the domestic and overseas markets. For now, we are keen to consolidate its overseas business."

With regard to the possibility of TCS overseas listing, Mr Mahalingam said, "There is a lock-in period of one year for the shareholders and promoters of TCS. We have recently listed on the stock exchanges. We will evaluate subsequently and take the decision to list in overseas."

On the possibility of merger of other Tata group companies such as Tata Technologies (a company focussed on automotive and design technologies) and Tata Interactive (a content developer) with TCS, Mr Ramadorai said, "We will deliberate on this and consider this at an appropriate time. It is for the shareholders and board to decide about such matters."

"The last few quarters for CMC were focussed on consolidation and synergising its operations with TCS. That means we witnessed few additions in techies but no one was sent out. The company currently has about 3100 employees and this year could possibly see the addition of about 200-300 people. The CMC education division has turned the corner and witnessed good growth in the last quarter," Mr Ramanan said.