Prabhudas Lilladher is bullish on Rolta India and has recommended accumulate rating on the stock with a target of Rs 85 in its February 12, 2013 research report.
“Rolta reported Q2FY13 revenue in-line with our expectation but margins below expectation. The company continues to see benefits in transforming into IP-led solutions from pure-play GIS/Engineering services company, which has helped in supporting the revenue growth. We expect stability in earnings performance, going ahead. We retain our ‘Accumulate’ rating.”
“Rolta reported revenue growth of 12percent QoQ to Rs5,265m (PLe: Rs5,218.6m, Cons: Rs4,960m). EBITDA margin dipped by 435bps QoQ to 40.9percent (PLe: 43percent, Cons:45.7percent), mainly due to a decline in margins of EITS (531bps) QoQ & higher sub-contracting cost. However, EPS grew by 11.4percent QoQ to Rs4.4 (PLe: Rs4.3, Cons: Rs4.15), due to lower tax provisioning. Overall order book grew by 7.4percent QoQ to Rs23,705m, witnessing a CQGR of 3percent over the last six quarters. EGES order book grew by 1.2percent QoQ, whereas, EITS grew by 11.3percent QoQ on account of several million dollar deals won recently. It is a US-based company which provides total solutions consisting of hardware, software, advisory & technology services for implementing IT strategies like Cloud computing & Virtual data centers.”
“The company has demonstrated improvement in order book and decent organic revenue growth. We expect high interest cost to impede the growth at the bottom-line; however, improving business environment would give some respite. We retain ‘Accumulate, with a TP of Rs85, 6x FY13e earnings estimates,” says Prabhudas Lilladher research report.
Non-Institutions holding more than 90% in Indian cos
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