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Rolta India
FCF improvement to drive
rerating; Buy
„Strong rev visibility, FCF improvement to drive re rating
Rolta 3Q was impressive with revenue beat of 4% QoQ and recurring PAT beat of
4% QoQ. We raise FY12 & FY13e earnings by 2 to 3% to factor 6% revenue
increase, offset by margin impact from investments in SG&A. Expect stock to rerate
given 1) strong FY12 rev visibility (over 70%) led by robust order intake levels, 2) 2x
jump in FCF during FY12 and 3) our view that investor concern on FCCB
redemption should ease given improvement in FCF. Roll forward to FY12e and
raise PO to Rs230 ($4.90/GDR). Valn at 7x FY12E attractive for 20% EPS CAGR.
Strong 3Q; record order intake levels
Reported 3Q revenues increased by 4% QoQ, 3% ahead of BofAMLe and factors
impact from non consolidation of Shaw JV revs given stake sale. Excluding sale
impact, revs increased by 7% in our view. Recurring PAT increased by 4% led by
revenue growth and 40bps margin expansion. Fresh order intake up 30% yoy to
Rs5.9bn, highest in last three years. Total order book up 15% yoy to Rs20bn.
FY11 guidance raised; FY12 growth to accelerate
Management raised FY11 revenue guidance to 16-18% vs 15% earlier despite
revenue loss from stake sale and now expects PAT to grow 25% yoy vs atleast
15% earlier. Order pipeline remains healthy and it expects FY12 revenue growth
rate to be better than FY11. It also strengthened its team with hiring of Rajesh
Kalra (ex MD RMSI) as president business operations.
2x jump in FCF likely; FCCB concern should ease
Post FCF turn around in FY11, we expect FCF to jump 2x in FY12 led by rev
growth and reduction in capex. Believe investor concern on FCCB redemption
(due in FY12) should ease given FCF improvement.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Rolta India
FCF improvement to drive
rerating; Buy
„Strong rev visibility, FCF improvement to drive re rating
Rolta 3Q was impressive with revenue beat of 4% QoQ and recurring PAT beat of
4% QoQ. We raise FY12 & FY13e earnings by 2 to 3% to factor 6% revenue
increase, offset by margin impact from investments in SG&A. Expect stock to rerate
given 1) strong FY12 rev visibility (over 70%) led by robust order intake levels, 2) 2x
jump in FCF during FY12 and 3) our view that investor concern on FCCB
redemption should ease given improvement in FCF. Roll forward to FY12e and
raise PO to Rs230 ($4.90/GDR). Valn at 7x FY12E attractive for 20% EPS CAGR.
Strong 3Q; record order intake levels
Reported 3Q revenues increased by 4% QoQ, 3% ahead of BofAMLe and factors
impact from non consolidation of Shaw JV revs given stake sale. Excluding sale
impact, revs increased by 7% in our view. Recurring PAT increased by 4% led by
revenue growth and 40bps margin expansion. Fresh order intake up 30% yoy to
Rs5.9bn, highest in last three years. Total order book up 15% yoy to Rs20bn.
FY11 guidance raised; FY12 growth to accelerate
Management raised FY11 revenue guidance to 16-18% vs 15% earlier despite
revenue loss from stake sale and now expects PAT to grow 25% yoy vs atleast
15% earlier. Order pipeline remains healthy and it expects FY12 revenue growth
rate to be better than FY11. It also strengthened its team with hiring of Rajesh
Kalra (ex MD RMSI) as president business operations.
2x jump in FCF likely; FCCB concern should ease
Post FCF turn around in FY11, we expect FCF to jump 2x in FY12 led by rev
growth and reduction in capex. Believe investor concern on FCCB redemption
(due in FY12) should ease given FCF improvement.
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