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MRO-TEK, NTT Data's Indian Supplier, Aims to Post Profit Next Fiscal Year
MRO-TEK Ltd., a maker of modems and routers for Japan’s NTT Data Corp., aims to turn to profit next year as India’s banks and insurers spend on integrating their branches and automating their offices.
“In the Indian spectrum of data communications and networking there is a tremendous potential and it is still developing,” Himadri Nandi, managing director, said in an interview. “We hope to be profitable next fiscal year.”
The market for computer networking equipment in India, which is worth about 60 billion rupees ($1.3 billion), may expand as banks install more automated teller machines and insurance companies link their offices, Nandi said. Bangalore- based MRO-TEK posted a loss of 16.4 million rupees in the year ended March from a profit of 33.8 million rupees a year earlier.
“Last year was bad because the recession was in effect and most projects did not take off, Nandi said. “Indian corporations cut down most of their capital expenditure and our products came under the bracket where it could be postponed.”
Sales of computer servers in India declined 15 percent to 101,827 units in the year ended March 31, from a year earlier, according to the Manufacturers Association for Information Technology. Sales of network interface cards fell 12 percent to 3.45 million units last year, according to a statement posted on the industry group’s website on July 28.
Shares of MRO-TEK rose 1.3 percent to 32 rupees at the 3:30 p.m. close of trading in Mumbai after climbing as much as 5.2 percent. The stock has gained 0.3 percent this year compared with a 5.7 advance by the benchmark Sensitive Index.
Demand Reviving
Demand is reviving, Nandi said. The company, which also supplies equipment to Siemens AG, Nortel Networks Corp., Reliance Communications Ltd. and Tata Teleservices Maharashtra Ltd., has orders worth as much as 60 million rupees from about 15 new clients in India this year, Nandi said. The company added five customers last year, he said.
MRO-TEK expects flat sales this year as customers have negotiated lower prices, Nandi said. The network equipment maker, which posted revenue of 745 million rupees in the year ended March, plans to invest 25 million rupees to make new products at its plant in Bangalore. The company will also increase its workforce by 10 percent next year, from 240 people now, he said.
To contact the reporter on this story: Jay Shankar in Bangalore at jshankar1@bloomberg.net
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