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W e a k O r d e r b o o k c o n t i nu e s t o b e a c o n c e r n … .
Rolta reported numbers which were below our estimates. Rupee
revenues declined 2.9% QoQ and grew 6.9% YoY while PAT grew by
4.8% QoQ. The key highlights for the quarter were 1. | 13.4 crores
provision made for market-to-market (MTM) losses on foreign currency
loans. 2. 2.9% decline in order book to | 2,017 crores from | 2,076 crores,
& 3. Likely revenue underperformance in subsequent quarters as indicated
by management. EGDS rupee revenues declined by 6.6%, EITS grew by
2.1% whereas EDOS grew by 0.2% QoQ. Number of employees stood at
3,778, a decline of 216 employees QoQ. Refinancing of FCCB, due in June
2012, through ECB could likely create overhang. Consequently, despite
maintaining our HOLD rating we recommend switching to large cap
names.
ƒ Earnings summary
Reported revenues of | 471.7 crore (I-direct estimate: | 500 crore)
declined 2.9% QoQ. Consolidated PAT of |65.2 crores, though
below our estimate of |68.9 crore, grew 4.8% QoQ. Sequentially,
EGIS EBITDA margins increased by 163 bps QoQ to 53.7%, EDOS
EBITDA margins increased by 108 bps QoQ to 41.4% and overall
EBITDA margins increased by 82 bps QoQ to 40.2%. Order book
decline continues to be a concern. Management indicated that sharp
rupee depreciation led to an increase in the total debt by 404 crores
to |1867 crores from | 1463 crores at the end of Q4FY11. We
estimate, ~| 272 crores could be attributed to MTM losses, (using
period end $\| conversion rate of 44.69 and 53.01 for Q4FY11 and
Q2FY12 respectively) and the increase in debt to be around |132
crores. Management indicated FCCB refinancing is on track and
could likely conclude in the next 3-4 weeks. Cash on books stood at
| 48 crores as on Q2FY12.
V a l u a t i o n
We expect the company to register revenue/PAT growth of 15%/21%
CAGR during FY10-FY12E period. That said, we continue to value Rolta
based on FY12E earnings due to the uncertain macroeconomic
environment and revenue visibility. Consequently, we value the stock at
3.5x our FY12E EPS of | 23 i.e. at |81 and maintain our HOLD rating
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Click here for PDF LINK
W e a k O r d e r b o o k c o n t i nu e s t o b e a c o n c e r n … .
Rolta reported numbers which were below our estimates. Rupee
revenues declined 2.9% QoQ and grew 6.9% YoY while PAT grew by
4.8% QoQ. The key highlights for the quarter were 1. | 13.4 crores
provision made for market-to-market (MTM) losses on foreign currency
loans. 2. 2.9% decline in order book to | 2,017 crores from | 2,076 crores,
& 3. Likely revenue underperformance in subsequent quarters as indicated
by management. EGDS rupee revenues declined by 6.6%, EITS grew by
2.1% whereas EDOS grew by 0.2% QoQ. Number of employees stood at
3,778, a decline of 216 employees QoQ. Refinancing of FCCB, due in June
2012, through ECB could likely create overhang. Consequently, despite
maintaining our HOLD rating we recommend switching to large cap
names.
ƒ Earnings summary
Reported revenues of | 471.7 crore (I-direct estimate: | 500 crore)
declined 2.9% QoQ. Consolidated PAT of |65.2 crores, though
below our estimate of |68.9 crore, grew 4.8% QoQ. Sequentially,
EGIS EBITDA margins increased by 163 bps QoQ to 53.7%, EDOS
EBITDA margins increased by 108 bps QoQ to 41.4% and overall
EBITDA margins increased by 82 bps QoQ to 40.2%. Order book
decline continues to be a concern. Management indicated that sharp
rupee depreciation led to an increase in the total debt by 404 crores
to |1867 crores from | 1463 crores at the end of Q4FY11. We
estimate, ~| 272 crores could be attributed to MTM losses, (using
period end $\| conversion rate of 44.69 and 53.01 for Q4FY11 and
Q2FY12 respectively) and the increase in debt to be around |132
crores. Management indicated FCCB refinancing is on track and
could likely conclude in the next 3-4 weeks. Cash on books stood at
| 48 crores as on Q2FY12.
V a l u a t i o n
We expect the company to register revenue/PAT growth of 15%/21%
CAGR during FY10-FY12E period. That said, we continue to value Rolta
based on FY12E earnings due to the uncertain macroeconomic
environment and revenue visibility. Consequently, we value the stock at
3.5x our FY12E EPS of | 23 i.e. at |81 and maintain our HOLD rating
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