Visit http://indiaer.blogspot.com/ for complete details �� �
Rolta India (ROLT.BO)
Good Quarter; Another Fund Raising Plan Approved
Good quarter; Asking rate to meet guidance low — Revenues at Rs4.3b were up
3.8% qoq (CIRA: +2.7% qoq) while margins expanded by ~80bps qoq (CIRA:
~200bps contraction – the company took wage hikes). As a result, profits at
Rs748m (CIRA: Rs620m) grew ~8% qoq. For FY11, CQGR needed over Q2-Q4 to
achieve the revenue guidance (upper end of 15% growth) is now just 2% while the
profit CQGR (lower end of at least 15% growth) is actually -1.3% – consensus
upgrades likely to happen.
Book-to-bill improves sequentially — The order book increased by ~Rs1b qoq and
now stands at Rs18.8b. The book-to-bill ratio improved sharply to 1.23x from
1.04x last quarter, up ~18% qoq – levels higher than this were last seen in
Q4FY08 and bodes well for future growth rates.
Other key highlights — (1) Headcount declined by 55 as the company shifts more
toward solutions. (2) Billing rates, on a qoq basis, improved in EGIS/EDOS
segments while it was stable in EITS. (3) Cash balance was ~Rs1b. (4) Gross debt
(including FCCBs) was ~Rs12.3b. (5) DSOs were 144 days (Q4FY10: 148 days).
(6) The company gave salary hikes offshore ~10% and onsite ~2.5% effective 1st
July. (7) IP revenues jumped sharply from ~10% last quarter to ~16% in Q1.
Fund raising approved — The Board has taken an enabling resolution to raise
funds up to $150m, through instruments like ADRs/GDRs/FCCBs/QIPs/Warrants or
Private Placements or any other form of securities convertible into equity shares.
According to management, there are no immediate plans to raise any funds, but a
resolution has been passed in case such a need arises.
Reasonable Valuations + Underperformance = Buy — The stock underperformed
the market by ~32% in the past three months (~30% YTD) and trades in singledigit
multiples on FY11 basis. Valuations are attractive – maintain Buy.
No comments:
Post a Comment