ITI was pressured by the fact that the company ended in the red for the just concluded quarter despite taking steps to improve efficiency.
By 10:40 IST on Monday, the scrip of the telecoms equipment PSU slipped 2.73% to Rs 19.60. It registered volumes of 4,440 shares on BSE by then.
On Friday, after market hours, ITI announced a loss of Rs 45.60 crore for Q3 ended 31 December 2002, compared to a net profit of Rs 2.50 crore in the corresponding period of the previous year. Net sales declined by 23% to Rs 391.14 crore (Rs 3.91 billion) from Rs 507.83 crore (Rs 5.07 billion) in DQ 2001.
However, a poor performance was in any case expected going by the lack of orders for fixed lines mainly from BSNL and MTNL. The results also come in the wake of ITI taking steps to improve efficiency. These include swapping high-cost loans to low-cost borrowings and introduction of a voluntary retirement scheme for employees.
Recently, ITI bagged an order worth Rs 42 crore from metro-based telecoms service provider MTNL for supplying Internet services equipment apart from providing high bandwidth capacity on demand, ensuring secure transactions, intrusion-free service and gateway connectivity. The order was a significant step in the company's continuous growth in the IT business.
Reports have also surfaced that ITI is planning to enter the international long distance services segment. It may be noted that the government opened up this high-profile segment to private players with effect from 1 April 2002. ITI is reported to have informed the department of telecommunications that it is looking out for a joint venture partner in the ILD segment. ITI proposes to launch its ILD services only in the next financial year, however.
ITI plans to emerge as a total solutions provider instead of being a pure play manufacturing company.
Recently, ITI announced that its core research and development wing has designed and developed the first ever indigenous Web-enabled Smart Connect call centre solution, which can be customised to suit a variety of business needs providing IT-enabled services on a single platform through phone, fax, e-mail and Internet.
Formerly known as Indian Telephone Industries, ITI was an entirely government-owned concern. But, with the divestment policy, the government diluted some of its holding in favour of financial institutions, banks and mutual funds. Currently, the government has a 76.6% stake in ITI.
ITI manufactures telecom products like electronic switching equipment, digital radio, telephone instruments, optical fibre equipment, open wire bags, and digital exchanges. It has technical tie-ups with Alcatel, France, and NKT, Denmark, for switching equipment and optical link technical equipment and with NEC, Japan, for digital microwave equipment. Major users of the products of ITI are the DoT and the Defence.
As on 31 December 2002, the public and institutions held 13.07% and 5.21% in ITI, respectively.