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Analysts Presentation
Year Ended 31st March, 2005


    Mumbai; 22nd April, 2005




         Your IT Partner


          ...
Disclaimer
This presentation has been prepared by CMC solely for providing information about the Company.
Certain statemen...
Revenue – FY 2004-05

• Total Revenue is marginally up                 Total Revenue
  2.5% at Rs. 782 crores           (R...
Segmental Revenue – FY 2004-05
                                                           FY04
           FY05
           ...
Segmental Revenue (incl. International) - FY 2004-05
                                                                     ...
Segmental Revenue - FY 2004-05
                                          FY04
               FY05

                       ...
International Revenues – FY 2004-05

                                             FY04
          FY05
                    ...
Profitability – FY 2004-05
                                 PBT                                PAT
                       ...
Consolidated Financial Performance


                                         • Revenue of CMC Americas
(Rs crore)      FY...
Margins

                                              PBT Margins
     PBDIT Margins (Adj.)

                            ...
Shareholder Value


                       EPS (Rs.)                                          Book Value

         35.00  ...
Debtors Profile – Q4 (FY 2004-05)

•   Debtors level (after provisions)
                                                  ...
Quarterly Performance Analysis




                                 13
Quarterly Performance – FY 2004-05
                                                                                       ...
Manpower (FY 2004-05)
                                      (Numbers)
• Net addition of 177 people in FY
                 ...
Key Focus Areas
• Improve revenue mix:
      •Increase International Revenues (Growth of 32.5% in FY 05 over FY 04)
      ...
Shareholding Pattern – 31st March, 2005

                    FIIs
                            Mutual Funds
               ...
Thank You

            18
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CMC Analysts 20Presentation 20- 20FY%2005

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CMC Analysts 20Presentation 20- 20FY%2005

  1. 1. Analysts Presentation Year Ended 31st March, 2005 Mumbai; 22nd April, 2005 Your IT Partner 1
  2. 2. Disclaimer This presentation has been prepared by CMC solely for providing information about the Company. Certain statements in this presentation are forward looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward looking statements. The risk and uncertainties relating to these statements include, but are not limited to, risk and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in IT services including those factors, which may affect our cost advantage, wage increases, our ability to attract and retain highly skilled professional, time and cost overruns on fixed price contracts, our ability to manage our international operations, reduced demand of technology in our key focus areas and our software products and solutions, withdrawal of Government fiscal incentives, political instability, un-authorized use of our intellectual property and general economic conditions affecting our industry. CMC, from time to time, make additional written or oral forward looking statements, including our report to shareholders. The Company does not undertake to update any forward looking statement that may have been made from time to time by or on behalf of the Company. This communication is for general information purposes only, without regard to specific objectives, financial situations and needs of any particular person. Please note that investments in securities are subject to risks including loss of principal amount. The Company does not accept any liability whatsoever, direct or indirect, that may arise from the use of the information herein. 2
  3. 3. Revenue – FY 2004-05 • Total Revenue is marginally up Total Revenue 2.5% at Rs. 782 crores (Rs crore ) 800 782 compared with Rs. 764 crores 764 750 in last year. • Revenue Growth driven by 700 E&T and International. 650 • E&T is up 55% from Rs. 17.8 600 crs to Rs. 27.6 crs; 550 International Revenues up 32% from Rs. 135.4 crs to Rs. 500 FY 04 FY 05 179.3 crs. • International Revenue growth driven by Embedded Systems. 3
  4. 4. Segmental Revenue – FY 2004-05 FY04 FY05 10% 11% 2% 4% 4% 2% 63% 60% 23% 18% 2% 1% Growth 100.00% 55.1% 32.5% 50.00% 0.1% 0.00% -50.00% -12.1% -47.5% -100.00% Customer System ITES Education & International Services Integration Training 4
  5. 5. Segmental Revenue (incl. International) - FY 2004-05 FY04 FY05 Customer Services System Integration 69% 70% ITES 23% 26% Educational Training Others 2% 4% 3% 2% Growth 0% 1% 100% 52.2% 50% 18.1% -1.1% 0% -50% -43.4% Customer Services Systems Integration ITES Education & Training 5
  6. 6. Segmental Revenue - FY 2004-05 FY04 FY05 80% 76% 18% 23% 1% 2% Growth 0.4% 32.5% 0.3% 0.2% 0.1% 0% -0.1% -2.5% Domestic International 6
  7. 7. International Revenues – FY 2004-05 FY04 FY05 30% 65% 27% 52% 18% 8% Growth 218.6% 250.00% 200.00% 150.00% 100.00% 46.3% 50.00% 4.7% 0.00% Services Solutions Embedded Systems 7
  8. 8. Profitability – FY 2004-05 PBT PAT PBDIT (Adj) (Rs crore) (Rs crore) (Rs crore) 70 60 65.71 70 63.88 62.22 60 47.99 50 60 50 50 40 40 40 32.94 30 23.06 30 30 20 20 20 10 10 10 0 0 0 FY 04 FY 05 FY 04 FY 05 FY 04 FY 05 • Profit before tax is down 50% at Rs. 32.9 crores compared with Rs. 65.7 crs in last year; • Profit after tax down 50% Rs. 23.1 crs. compared with Rs. 48.0 crs in last year; • Profitability impacted primarily due to provisioning against receivables from two international clients (Rs. 16 crs) due to suspension of work following their organizational restructuring. • Miscellaneous Income Lower by Rs. 9.8 crs; last year there was earlier-year provisions written back (Rs. 10.14 crs) (PBDIT adjusted for variation due to Misc. income, provisioning for bad & doubtful debts and exchange losses) 8
  9. 9. Consolidated Financial Performance • Revenue of CMC Americas (Rs crore) FY05 FY04 Growth Y-o-Y higher by 8% at $ 19.8 mn Total Revenue 814.2 801.8 1.6% compared with $ 18.2 mn last year. PBT 34.7 62.9 -55.2% • CMC Americas turn out PBT Margins 4.3% 7.9% profitable year for the first time PAT 24.8 44.8 -44.6% after acquisition by TCS, with a net profit of $ 388K compared PAT Margin 3.0% 5.6% with a loss of $ 707k in last year. • Focus is on increasing solutions and embedded systems revenue in Americas 9
  10. 10. Margins PBT Margins PBDIT Margins (Adj.) PAT Margin 10.00% 10.00% 8.60% 9.00% 8.60% 9.00% 7.00% 8.00% 6.30% 8.00% 8.00% 6.00% 7.00% 7.00% 5.00% 6.00% 6.00% 5.00% 4.00% 5.00% 4.20% 4.00% 2.95% 4.00% 3.00% 3.00% 3.00% 2.00% 2.00% 2.00% 1.00% 1.00% 1.00% 0.00% 0.00% 0.00% FY04 FY 05 FY04 FY 05 FY04 FY 05 (PBDIT adjusted for variation due to Misc. income, provisioning for bad& doubtful debts and exchange losses) 10
  11. 11. Shareholder Value EPS (Rs.) Book Value 35.00 140 31.38 116 30.00 120 106 25.00 100 20.00 80 15.22 15.00 60 10.00 40 5.00 20 0.00 0 FY04 FY 05 FY04 FY 05 (Book value is after dividend of Rs. 4.50 per share proposed for FY 05 subject to shareholders approval) ) 11
  12. 12. Debtors Profile – Q4 (FY 2004-05) • Debtors level (after provisions) 30-60 days increases to Rs. 248 Crs (116 days) 60-90 days 8% 8% from Rs. 208 Crs (97 days) at the beginning of the quarter and Rs. 180 Crs. (86 days) at the beginning of the 90-180 days year due to higher year end billing. 13% 0-30 days 56% • Debtors above 90 days fall from 32% to 28% during the year. • Unbilled debtors falls to Rs. 94 Crs. (44 >180 days 15% days) from Rs. 155 crs. (73 days) at the beginning of the quarter and Rs. 115 crs (55 days) at the beginning of the year. 12
  13. 13. Quarterly Performance Analysis 13
  14. 14. Quarterly Performance – FY 2004-05 Systems Integration Total Revenue Customer Services (Rs crore ) (Rs crore) (Rs crore) 25 250 160 144.5 215.5 140 205.2 20.2 123.7 200 20 18.6 184.8 18.4 17.7 120 177.0 105.8 102.8 100 15 150 80 100 10 60 40 5 50 20 0 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Edu & Trg. International ITES (Rs crore) (Rs crore) (Rs crore ) 8 60 5 4.6 7.4 7.3 4.6 4.5 7.0 4.5 50.1 7 50 47.3 4 5.9 43.1 6 3.3 3.5 38.5 40 5 3 4 30 2.5 2 3 20 1.5 2 1 10 1 0.5 0 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 14
  15. 15. Manpower (FY 2004-05) (Numbers) • Net addition of 177 people in FY 3500 2004-05. 3162 3082 • Focus on building capabilities 2985 3000 2883 and competencies especially in niche technology like embedded 2500 systems etc. and select domains. 2000 • Compensation packages restructured to incorporate skill 1500 and domain premium. 1000 Q1 Q2 Q3 Q4 15
  16. 16. Key Focus Areas • Improve revenue mix: •Increase International Revenues (Growth of 32.5% in FY 05 over FY 04) •Defocus from pure equipment business unless accompanied by service business (This year equipment business remained flat at Rs. 379 crores) • Build sustained service revenue stream around niche areas like Embedded systems and CMC’s solutions (Embedded systems grew more than 200% in FY 2004-05) • Capitalize on resurgent Education and Training market (E&T revenue grew 55% over last year) • Process Improvement – Roll-out of Ultimatix from 1st April, 2005 • Human Resources – Skill and compensation management; net addition of 177 people in FY 2004-05; introduction of skill and domain premium in compensation package. 16
  17. 17. Shareholding Pattern – 31st March, 2005 FIIs Mutual Funds 8.73% 15.32% Banks, FIs, Ins. Cos. 13.08% 51.12% TCS Ltd. Others/Public 11.75% 17
  18. 18. Thank You 18

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