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                              | IT INDIA '97/COMDEX
December 2, 1997


Tata Elxsi to focus on software exports

Tata Elxsi (India) Limited, which hitherto has concentrated on the hardware business, plans to sharpen focus on software exports.

Managing Director S Devarajan has said that at present software exports is a "small activity in terms of revenue''. However, the software business, which in 1996-97 accounted for just 15 per cent of Tata Elxsi's total turnover, would in another two years represent 50 per cent of the company's turnover, he said.

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The company, which addresses niche markets in its domestic business, plans to do the same in its export business as well, he said.

Tata Elxsi caters for the US, Japanese and European markets. Further, Tata Elxsi, which is going through a "phase of consolidation'', hopes to wipe out its Rs 32 million accumulated losses by this fiscal end.

The company reported a 30 per cent growth in revenue and close to 100 per cent growth in gross profit for the half-year ended September 30, 1997. The provision for depreciation in the first six months of this fiscal is Rs 18.5 million against Rs 9.3 million in the same period the previous year. As a result, the accumulated losses, which stood at Rs 50.5 million in the beginning of this fiscal came down to Rs 32 million.

The company reported a turnover of Rs 359.6 million for the half-year ended September 30, 1997, against Rs 281.5 million in the same period of the previous year.

"We are keen on recovering from our history at the earliest,'' Devarajan said. The company will broadbase solutions to ensure that all aspects of the industry are catered for.

Devarajan said, "Our strategy would be to align ourselves in a different segment of the same marketplace to address the lower end needs of our customers.''

As far as the company's domestic business is concerned, at present, 80 per cent of the revenues come from its Silicon Graphics business. Tata Elxsi is the primary distributor for Silicon Graphics and has over 85 per cent of the market in India.

"While we have already established our Silicon Graphics business, this year, our Compaq business is poised to achieve good results,'' he said.

Tata Elxsi, set up in 1988, is a public limited company promoted by Tata Industries Limited and Tata Technologies, Singapore. Tata Technologies was earlier Tata Elxsi when Elxsi held a stake in the Singapore company.

The Tatas have a 40 per cent stake in the company and the rest is with the public.

The company came out with a public issue in 1991 to finance a project for the manufacture of microprocessor based computers with a technology tie-up with Elxsi.

This manufacturing facility has now been converted into a design and development centre which, caters mainly to overseas clients.

The company went through hard times in the initial years as a result of the high manufacturing overheads it incurred at a time when import duties were coming down.

Tata Elxsi's main operation is in the area of providing solutions in the visual and technical computing domain in the domestic market. In 1996-97, of the turnover of Rs 680 million, Rs 640 million came from the domestic business.

- Compiled from the Indian media

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