ITI Improves Topline, Leads In Telecom Turnkey Services Segment

Bangalore, December 15, 2006:

The telecom equipment major ITI has recorded a 26% increase in sales at Rs.1749 Cr during 2005-06 over that of the previous year. This performance, achieved in the face of growing competition and lack of financial resources, represents a 40% jump over the 2003-04 turnover when ITI faced the brunt of steep crash in equipment prices. “The year proved significant for ITI by virtue of its rapid strides in technology acquisition. The Company saw a spurt in its manufacturing activities during the year with supplies of GSM mobile infrastructure equipment manufactured indigenously at its two new facilities at Mankapur and Rae Bareli yielding Rs.500 Cr against an order of 3 million lines worth Rs. 900 Cr for the West Zone”. Shri Pritam Singh, Incharge CMD told the Company’s shareholders addressing the 56th AGM here today.

Shri Singh stated that so far entire supplies have been delivered for this order. With all equipment in place and about two million lines RF capacity already generated, BSNL has released around 2.2 million lines to subscribers. Subsequently, an order for 2 million lines has also been received which the Company hopes to complete in the ensuing year, he disclosed. This, he clarified, is in addition to an order for 750 KL received from MTNL for Mumbai. ITI would also receive orders worth more than Rs.300 Cr for 2.1 million lines of CDMA-WLL. In a first major initiative in the country to manufacture and service GSM equipment for export markets, Shri Singh said ITI has secured an LOI from Alcatel for two million lines. Under this, an initial order for supply of 600 BTS (Base Transceiver System) and 900 TRX (Transceiver) has been received, he elaborated.

“In a fitting testimony, your Company continues to hold the numero uno position as India’s top telecom turnkey solutions provider, having received the 7th Annual Voice & Data 100 Award 2006 for the third time”, Shri Singh observed. Expressing confidence that the Company has geared itself up to meet requirements of emerging markets with turnkey solutions for GSM networks, WLL-CDMA, CDMA-IFWT (Integrated Fixed Wireless Terminals) and Defence projects, Shri Singh remarked that the successful completion of the mammoth ASCON Phase III Network for the Indian Army which was recently inaugurated, underlines ITI’s ability in standing up to the challenge of making critical communication possible by means of efficient project management. He said among the products which have been developed and successfully productionised are Wireless Siren System with Simultaneous Voice Broadcast facility, IDR (Intermediate Data Rate) Modem, etc. Pointing out that ITI’s diversification into non-telecom products has thrown up a wide range of bank mechanizing gadgets, SMPS power supplies and solar panels, he revealed that projects such as ADSL (Asymmetric Digital Subscriber Line)networks, NGN(New Generation Networks) known as soft switch, broadband networks, WiMAX (Worldwide Interoperability of Microwave Access), antenna and microwave equipment for GSM, GPON (Gigabit Passive Optical Networks), e-governance are on the anvil for which technologies have already been inducted. These include smart cards and the Company has bagged a trial order for a pilot project on National ID Cards. “The manufacture of the aforesaid products will lead to substantial increase in value addition and effective utilization of manpower”, Shri Singh told shareholders.

Outlining the saving measures, he said the Company’s continuing endeavour to cut costs has borne fruit – material cost was brought down to 70% of sales value including Excise Duty and financial expenses were reduced to 13% of sales including ED. Cost savings of Rs.5 Cr were made on controllable expenses out of which Security cost savings accounted for a major chunk. Value addition on production excluding ED went up to Rs.304 Cr. Over 400 employees opted for VR during the year in the rightsizing exercise which has seen a total exit of 13,213 staffers since the Scheme’s inception in 1991. “The Company is tackling its surplus manpower by redeploying and retraining. While over 900 personnel were engaged in installation and commissioning work of GSM turnkey project in West Zone, around 200 were put on WLL-CDMA and MLLN projects”, he added.

On the Company’s outlook for the current year, Shri Singh said that with the confirmed orders on hand worth Rs. 1839 Cr and further APOs (Advance Purchase Orders) of Rs. 568 Cr, the Company is eyeing a turnover target exceeding Rs.2000 Cr for FY 2006-07.

Source : Equity Bulls

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