ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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BLUE BLENDS-New Ventures

HCL Unit in US HCL has been able to step up its turnover in 1987-88 from previous year's Rs 63.33 crore to Rs 91.13 crore by aggressively carving out increased market share in the expanding and fiercely competitive computer market. But it had to experience a notable erosion in profit margins. Gross profit turned out to be lower at Rs 10.26 crore against Rs 11.29 crore of 1986-87. The company's endeavour to stabilise product quality with increased indigenisation in its reprographics division placed gross margins under pressure. Moreover, interest burden was substantially higher because of large expansion and diversification projects. The increase in gross block by Rs 334 lakh substantially reduced the taxation provision and net profit was higher at Rs 8.42 crore (Rs 6.87 crore). The directors have maintained dividend at 10 per cent which is covered 5,69 times by earnings as against 4.64 times previously. In a remarkable achievement during the year, the company developed the Magnum multi processor with the world's first implementation of Unix Version 3 on Motorola 68030. The company plans to maximise its comparative advantage by manufacturing and marketing the Magnum in the US through a wholly owned subsidiary. The government of India has already approved the incorporation of a wholly-owned subsidiary in the US with an equity contribution of US $ 5 million.

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