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N o s u r p r i s e s …
Rolta reported numbers that were in line with our estimates. Revenues
grew 3.5% QoQ and 15.6% YoY while PAT grew 5.3% QoQ. The EGDS
business grew 4.5%, EITS by 2.9% and EDOS was the weakest with 1.8%
QoQ. Rolta’s order book grew by a modest 0.4% QoQ and the number of
employees stood at 2,022, a decrease of 165 employees QoQ. Finally,
though we are maintaining our HOLD rating, we believe staying put with
large caps (TCS, Infosys) continues to be the best bet given the uncertain
macro environment.
ƒ Earnings summary
The company reported revenues of | 476.6 crore (I-direct estimate:
| 479.7 crore) with a growth of 3.5% QoQ. The growth was primarily
driven by EGDS and EITS, which grew 4.5% QoQ and 2.9% QoQ
while EDOS increased marginally by 1.8% QoQ. Gross margins
increased by 224 bps YoY on account of higher subcontracting,
material cost and lower employee base. Rolta reported PAT of | 88
crore vs. our | 64.5 crore estimate aided by higher other income of |
12.4 crore vs. our | 4.5 crore estimate.
ƒ Operating metric highlights
EGDS contribution increased to 53.5% vs. 53% in Q3 while EITS
contribution increased to 24.9% vs. 23.5% in Q3. EGDS and EDOS
EBITDA margins increased 91 bps and 113 bps sequentially to
53.7% and 41.1%, respectively while EITS margins declined 20 bps
QoQ to 12.1%. FY12E capex stands at | 250 crore wherein | 100
crore would be used for renovation of existing building while the
rest could be use for acquisitions. The order book increased by a
modest 0.4% QoQ to | 2,048 crore vs. | 2,039 crore in Q3FY11.
V a l u a t i o n
We expect the company to register revenue/PAT growth of 13.7%/20%
CAGR during FY10-FY12E. That said, we continue to value Rolta based on
FY12E earnings due to the uncertain macroeconomic environment.
Consequently, we have valued the stock at 5x (6.8x earlier) FY12E EPS of
| 23 and maintain our HOLD rating.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
N o s u r p r i s e s …
Rolta reported numbers that were in line with our estimates. Revenues
grew 3.5% QoQ and 15.6% YoY while PAT grew 5.3% QoQ. The EGDS
business grew 4.5%, EITS by 2.9% and EDOS was the weakest with 1.8%
QoQ. Rolta’s order book grew by a modest 0.4% QoQ and the number of
employees stood at 2,022, a decrease of 165 employees QoQ. Finally,
though we are maintaining our HOLD rating, we believe staying put with
large caps (TCS, Infosys) continues to be the best bet given the uncertain
macro environment.
ƒ Earnings summary
The company reported revenues of | 476.6 crore (I-direct estimate:
| 479.7 crore) with a growth of 3.5% QoQ. The growth was primarily
driven by EGDS and EITS, which grew 4.5% QoQ and 2.9% QoQ
while EDOS increased marginally by 1.8% QoQ. Gross margins
increased by 224 bps YoY on account of higher subcontracting,
material cost and lower employee base. Rolta reported PAT of | 88
crore vs. our | 64.5 crore estimate aided by higher other income of |
12.4 crore vs. our | 4.5 crore estimate.
ƒ Operating metric highlights
EGDS contribution increased to 53.5% vs. 53% in Q3 while EITS
contribution increased to 24.9% vs. 23.5% in Q3. EGDS and EDOS
EBITDA margins increased 91 bps and 113 bps sequentially to
53.7% and 41.1%, respectively while EITS margins declined 20 bps
QoQ to 12.1%. FY12E capex stands at | 250 crore wherein | 100
crore would be used for renovation of existing building while the
rest could be use for acquisitions. The order book increased by a
modest 0.4% QoQ to | 2,048 crore vs. | 2,039 crore in Q3FY11.
V a l u a t i o n
We expect the company to register revenue/PAT growth of 13.7%/20%
CAGR during FY10-FY12E. That said, we continue to value Rolta based on
FY12E earnings due to the uncertain macroeconomic environment.
Consequently, we have valued the stock at 5x (6.8x earlier) FY12E EPS of
| 23 and maintain our HOLD rating.
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