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CMC Ltd, acquired by TCS in 2001, is now open to making acquisitions itself, said Mr R. Ramanan, Managing Director and Chief Executive.
“We are looking at strategic businesses which will fit well with our profile, it could be anything,” he said. The company has cash reserves of almost Rs 300 crore.
The acquisition could happen over the next couple of years. “We are willing to wait; we want to build a sizeable base and have the maturity of being able to handle acquisitions,” he said.
Internally, the company is implementing its third round of transformation, CMC 3.0, where the objective will be growth through focus on three areas. These will be creating strong analytics in application solutions; leveraging cloud solutions; and introducing mobility solutions.
“How to bring the cloud element in every solution and service is one of our objectives. We want to have cloud versions of the solutions we have — for example, of our solution Genesys which we have for general insurance,” said Mr Ramanan.
No merger
The company wants to integrate mobility into engineering services. It is coming up with tools which will enable remote mobility management through smartphones and other devices. CMC 3.0 is about integrating the three components of analytics, mobility solutions and cloud, he said.
When TCS acquired it, CMC was operating at a margin of 3.5 per cent; less than 5 per cent of its business came from international operations and there was almost no presence in the private sector. The company had debt of over Rs 200 crore.
The last fiscal, however, saw an operating profit margin of 19.5 per cent. While international markets contributed 60 per cent of revenues, a change in the business model led to the private sector contributing over 50 per cent of business. Besides, 85 per cent of revenue came from high value-added solutions, said Mr Ramanan.
CMC will remain a separate subsidiary of TCS and will not be merged with the latter as that would dilute its brand, he said.
“We are complementary and a value accelerator to TCS and have a product-engineering approach,” he described the company.
“Our core competencies are implementation of large projects; it is not only engineering components that we provide, we put together disparate systems even if it requires design and manufacture of integrated hardware.” The new goal for the company is to be among the global top 20 by 2020 as a global systems engineering company, he said.
Large e-governance projects, projects in the oil and gas sector, insurance solutions, cargo logistics and warehouse-management solutions, vehicle-tracking solutions and training are some of the areas of competence of CMC.
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