FCCB conversions to reverse MTM losses: Rolta

Excerpts from CNBC-TV18’s exclusive interview with KK Singh:

Q: While the revenues have definitely gone up, there is a Mark-To-Market loss (MTM loss) of about Rs 30 odd crore which reflects in your profit also which also has gone down, the nature of this loss?

A: This is a loss that we had to provide because we raised Foreign Currency Convertible Bonds (FCCBs) on about July 1 of last year. So for the whole year we had to provide this as an entry only. This is based on the fact that FCCBs are in a fixed price at Rs 40.75, at which they will be converted. But at the end of June 30, which is our fiscal year end, the price was about Rs 42.90 - that has been provided for. As soon as FCCBs are converted, this will be rewritten and this will be reversed.

Q: So that’s just a bookend entry and it’s not recurring in nature?

A: It’s just a book entry and no cash outflow on that.

Q: Do you have any forex losses at this point of time because you would also get contracts in foreign currency?

A: Yes, we provide for them as part of our normal quarters which we have been doing all the time so that’s not something, which affects.

Q: No losses suffered on forex positions?

A: Not much. There have been gains there have been losses so they have been offset with each other so that’s not something, which has bothered us. 

Q: 40% growth on revenues is what you are targeting for FY09?

A: Yes, we are looking at through organic route itself we should be able to do 40% growth on revenue as well as on the bottomline we are looking at that. If we are able to do some more inorganic growth then of course we will even do better.

Q: Any acquisitions that you are planning over the next six-months?

A: We are looking at some acquisitions.

Q: Where are these and what will be the size roughly?

A: They are in US and we are looking into various segments - into GIS Technologies, into Business Intelligence for a general business, and Hyperion all kind of very high-end practices.

Q: What kind of revenue size are you essentially looking? What would be the size of these companies that you are hunting?

A: Between USD 25-50 million those are the kind of sizes, which we are looking at.

Q: How many acquisitions?

A: Two-three companies are on our radar.

Q: How many are you looking to acquire?

A: I don’t know how much we will go through but we are looking seriously at them and I think that we should be able to do something in next few months.