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Rolta India (ROLT.BO; Rs141.70; 1M)
Takeaways from Mumbai – Rolta presented at our India Investor Conference in
Mumbai. Below are key takeaways.
GIS segment doing well – This segment is performing well for the company. Rolta
has a significant presence in the Indian defense mapping space with a market share
of ~90%. The margins are also on an uptrend with increased license sales (which
are then followed by customization and maintenance revenues). The new trend in
this segment is the modeling of cities in 3D, which helps in disaster management.
Lowering of the debt-equity ratio – Current debt stands at ~Rs13b out of which
~Rs5b is due in Jun’12 while the rest is due over 2013-18. Management expects to
generate FCF of ~Rs1.0-1.5b in the next fiscal year (FY12 – June-ending
company), has cash of ~Rs1b and expects to re-finance the rest of the debt. The
company is unlikely to raise any equity at current valuations.
Other meaningful issues – (1) Capex expected in FY11 is at ~Rs3b –
management expects this to come down in FY12 as the bulk of the expansion is
over. FY12 will predominantly have maintenance capex. (2) Management expects to
be marginally FCF positive in FY11 with the big delta coming in FY12. (3) The
working capital requirement is coming down as the business in the private sector is
going up.
Maintain Buy – Management expects the growth profile to be similar in all three
segments – this excludes any large opportunity that may come through. The stock
trades at ~7x FY12 estimates.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Rolta India (ROLT.BO; Rs141.70; 1M)
Takeaways from Mumbai – Rolta presented at our India Investor Conference in
Mumbai. Below are key takeaways.
GIS segment doing well – This segment is performing well for the company. Rolta
has a significant presence in the Indian defense mapping space with a market share
of ~90%. The margins are also on an uptrend with increased license sales (which
are then followed by customization and maintenance revenues). The new trend in
this segment is the modeling of cities in 3D, which helps in disaster management.
Lowering of the debt-equity ratio – Current debt stands at ~Rs13b out of which
~Rs5b is due in Jun’12 while the rest is due over 2013-18. Management expects to
generate FCF of ~Rs1.0-1.5b in the next fiscal year (FY12 – June-ending
company), has cash of ~Rs1b and expects to re-finance the rest of the debt. The
company is unlikely to raise any equity at current valuations.
Other meaningful issues – (1) Capex expected in FY11 is at ~Rs3b –
management expects this to come down in FY12 as the bulk of the expansion is
over. FY12 will predominantly have maintenance capex. (2) Management expects to
be marginally FCF positive in FY11 with the big delta coming in FY12. (3) The
working capital requirement is coming down as the business in the private sector is
going up.
Maintain Buy – Management expects the growth profile to be similar in all three
segments – this excludes any large opportunity that may come through. The stock
trades at ~7x FY12 estimates.
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