Will meet 10-12% FY16 growth guidance: Rolta India

KK Singh, CMD of Rolta India, is confident about meeting double-digit growth guidance given by the company for FY16. Speaking about the quarter ended December, he says other income aided profitability.

He says the company has transferred defence technology to a wholly-owned subsidiary and is open to bringing in a strategic partner in the subsidiary.Below is the transcript of KK Singh’s interview with Ekta Batra and Anuj Singhal on CNBC-TV18.Anuj: I am looking at your numbers; the topline did not look too good, the bottomline went up. How would you explain the quarter gone by?A: The quarter went by is reasonable. I would say that the challenge has been there worldwide. The international as well as the domestic, the challenge has been there. Overall, we have maintained the topline so it has not reduced. We have maintained the profitability. In fact, the profitability is up. To some extent of course, there is other income there as well. Otherwise, it is doing well and we believe as we go forward -- this is the final quarter which is going on and we should be able to meet our guidance of double digit growth, which we gave in the beginning of the year. As we go forward into the next year, we should be much better off. That is what we are looking at.The big event of course, has been some of the reorganisation we did with our defence business during this quarter.Ekta: So, 10-12 percent growth guidance will be maintained?A: I think so, yes.Ekta: What about the defence business then? Give us more sense. It is a wholly owned subsidiary now. First time valuations have come out of over Rs 2,000 crore.A: This has been a very major thing, which we have been doing. This step we have been trying to take for the last 6-8 months and we have finally concluded it. We have been able to put the defence business into a separate subsidy. It is about Rs 2,000 plus crore of valuation which we could put there based on independent valuation.As we go forward, there will be a couple of things, there will be more focus on the defence business. Also, our IT business will be different, so we will have different IT focus, defence focus and I believe that in the next year we will be able to make capital calls also. See how we are going to organise our defence business in the long run.Anuj: So as of now, it is a wholly owned subsidiary, but going forward, you will be open to bringing in some investors in that?A: Strategic investor of course because with the Make in India programme, there is a tremendous interest in defence and then we are getting a lot of interest from international players to come in and be a part of the organisation.Ekta: So, how much would you be looking to divest? What would you be comfortable with?A: We have still not decided that. The board will have to take the call as you go forward. As I mentioned that almost this financial year is getting over on March 31. In the next year, we will be in a position to take that call as to what exactly and how much investment we will take in and what kind of partners we will look around for. But surely that would be in our cart.Anuj: Any update on that big order or is it, as of now, stuck in that same stage?A: No, it is progressing very well. In fact, there are various milestones and a very major milestone is something which is coming at the end of this month and everybody is fulfilling this milestone. That is a very major milestone and after that a prototype starts coming into position, which will take about a year plus and then after a prototype testing as a trend, then of course, after that everything else moves on. So, it is going on in a very positive direction. I am very happy with the progress it is going on with.Ekta: Any more you are bidding for in the pipeline?A: We are bidding for projects and they are continuously there. We are very much into the intelligence, surveillance and reconnaissance (ISR) projects around the country. We have the complete leadership. We have almost the complete market for intelligence and we are bidding into that area quite a bit. So, that will be something which we look forward to get more orders in the coming years.