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Mr John Helleur, Chief Executive Officer, Mahindra-British Telecom, with Mr Bharat Doshi, Executive Director Finance & Corporate Affairs, Mahindra & Mahindra, at a press conference in Mumbai on Friday.

MUMBAI, May 17

MAHINDRA-British Telecom (MBT), the software joint venture between the Mahindra Group and British Telecommunications Plc (BT), has reported a 31 per cent rise in profit after tax to Rs 126.28 crore for the year ended March 31, 2002, as against the previous corresponding Rs 96.58 crore.

Income grew by 35 per cent, from Rs 391.32 crore to Rs 527.43 crore. Had it not been for an over 300 per cent rise in depreciation from change in accounting policies, the growth in consolidated profit after tax would have been 61 per cent, Mr Shantanu Rudra, Chief Financial Officer, MBT, said at a press briefing, also addressed by Mr John Helleur, CEO, MBT, and Mr Bharat Doshi, Executive Director, Mahindra & Mahindra Ltd (M&M).

The Mahindras hold 57 per cent equity stake in MBT, including e-Mahindra's 31.9 per cent slated to be directly held by Mahindra & Mahindra (M&M) following a court approval for the scheme to amalgamate some M&M subsidiaries with the parent company.

MBT is focussed on the telecom industry worldwide. It has four software development centres in India and two in UK. Its ratio of onshore to offshore business has changed to 55:45 from the previous 67:33. Onsite margins are comparitively low. "This shift was a significant step we undertook last year,'' Mr Rudra said. Capacity utilisation was 71 per cent.

Last year, 83 per cent of MBT's revenues came from business with BT. While business with BT grew by 37 per cent to Rs 452.9 crore that from the US market declined by 16 per cent to Rs 64 crore. Mr Helleur said there are signs at present of the US market beginning to recover but he expects revival to be neither rapid nor sizable.

Aggressive growth in MBT's non-BT business, besides continued focus on telecom, developing premium sustainable accounts, rebuilding sales/marketing teams, broadening the scope of its BT business, developing partnerships/alliances and increasing high-end consultancy/solutions skills, form the framework of MBT's strategy for FY2003 and beyond, he said.

Growing the size of MBT's non-BT business and a reliably buoyant trend in the stock markets would be among factors that eventually decide the timing of MBT's initial public offering (IPO), Mr Doshi said. Declining to put a figure to the mix between BT and non-BT business the company would prefer, he said the non-BT component was hoped to be groomed in the form of a few large accounts.

Asked if the stakeholders' need for funds could catalyse the IPO, Mr Doshi replied, "Even if they wanted money, they don't want to sell cheap.''

Officials said the float to leverage the MBT brand and gain some liquidity was alive within the company, MBT having already gone through the IPO drill once before. The 10 per cent equity float planned then is not a sacrosanct figure and could change in line with prevailing rules, they said.

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