What made Digital unique prior to its merger with Compaq? It was the only publicly listed subsidiary of Digital outside the United States. Moreover, Compaq has merged majority of Digital's worldwide units with it. However, this Indian subsidiary remains the only entity which is still not 100 per cent wholly owned. All this has allowed the 10 year old Digital to retain its individual identity in India. The company has recently sought shareholder approval for changing its name to Compaq Computer Technologies India Ltd. Compaq has always been a leader in desk top PCs, the main reason for merging Digital being to utilise its expertise in PC servers.

The unaudited financial results for the 13 weeks ended September 26,1998 indicate that the topline has eroded slightly whilst the bottom line has risen marginally. The net sales have decreased by 1 per cent to Rs 65.5 crore. This is attributed to the general economic slowdown which affected the demand for IT goods and services. The other Income as a percentage of PBT remains at an abysmally low 1 per cent. Though interest costs have gone up to Rs 0.28 crore from Rs 0.03 crore, it is commendable that the bottom line has risen by 6.52 per cent to Rs 5.39 crore.

Operating profit for the period has increased to Rs 8.47 crore from Rs 7.88 crore. Commensurately, operating margins have marginally risen to to 12.96 per cent from 11.88 per cent. Thanks largely to a lower total expenditure of Rs 57.08 crore from Rs 58.44 in the corresponding period last year. Analysts indicate that prudent working capital management could be responsible for the same. Historically, Digital posts an improved performance in the second half (Jan-June) owing to the JFM (January,February and March) factorwherein corporates buy IT products to book depreciation. Prior to the merger the company was placed second in PC server sales and among the top five in desk top sales.