Rolta India delivered a steady set of earnings in the third quarter. The revenue growth has been stable and forex gain has aided margin improvement in Q3. In an interview with CNBC-TV18, KK Singh, CMD of Rolta India discussed the company's Q3 performance.
In an interview to CNBC-TV18, KK Singh, CMD of Rolta India spoke about the results and his outlook for the company.
Rolta India has seen a steady quarter. Higher finance cost weighs on profit but margins have improved. In an interview to CNBC-TV18, KK Singh, CMD of Rolta India discussed more about the performance.
In an interview to CNBC-TV18, KK Singh, CMD of Rolta India spoke about the results and his outlook for the company.
Speaking to CNBC-TV18, KK Singh, Chairman and Managing Director of Rolta India, said a conscious decision to decline contracts for third party-based projects had contributed to a flattish third quarter.
Forex moves contributed to reduction of other expenses, says KK Singh, CMD of Rolta India.
In an interview with CNBC-TV18, KK Singh, CMD of Rolta said that the company has been consciously cutting down software work to focus on its IP business and does not expect more erosion of revenue due to pruning of system integration work.
An increase in Rolta India's receivables period, an from average 120-125 days to almost 185-190 days led to a cash crunch, because of which it missed an interest payment, CMD KK Singh told CNBC-TV18.
KK Singh, CMD of Rolta India says the company has transferred defence technology to a wholly-owned subsidiary and is open to bringing in a strategic partner in the subsidiary.
KK Singh CMD, Rolta India said they were in the process of evaluating the valuation of defence business that would be transfered into a wholly owned subsidiary.
The company plans to streamline the defence business as a separate and distinct wholly owned subsidiary mainly because the regulatory environment is different for the defence and IT business, said KK Singh, CMD, Rolta India.
Rolta India's fourth-quarter EBITDA and net profits were weak, as the company was involved in implementating various intellectual property (IP) solutions, CMD KK Singh told CNBC-TV18's Ekta Batra and Anuj Singhal in an interview.
Rolta has denied the report from Glaucus Research which indicated fabrication of the reported capital expenditures in order to mask their materially overstated EBITDA. But Amit Tandon, MD of Institutional Investor Advisory Services is not convinced and says just a denial of charges by the company is not good enough.
The research report said the company does not produce free cash flow and cannot repay offshore bondholders without refinancing and advised investors to sell the company's bonds due 2018 and 2019.
The partnership with Hitachi is for big data analytics, said KK Singh, CMD, Rolta India
KK Singh of Rolta India said the company is already ready with the products, so the prototypes would take less than a year to be done.
The government will fund 80 percent of the prototype cost and partners will be expected to fork out the remaining 20 percent.
For the third quarter ended December 2014, the total income for the company was up 9% at Rs 966.8 cr versus Rs 885.3 cr quarter on quarter (Q-o-Q).
"We have no plans to delist the company," says KK Singh, CMD, Rolta India.
With its topline having advanced by 21 percent and EBITDA by 19 percent QoQ, Rolta anticipates its PAT and revenue growth to be higher than their expected guidance.
Rolta is seeing traction coming in from such as US and Middle East, Rolta India CMD KK Singh said. In growing verticals, the company is focusing on big data analytics, 3D modeling and defense systems, he added.
Rolta announced that it has been awarded a prestigious 3D City Modeling contract by a major Middle-East country.
KK Singh, CMD, Rolta India, says the rationale behind hiking promoter stake holding is on account of the condition that defence sector companies need to have atleast 50 percent promoter stakeholding to be able to participate in manufacturing and in defense make India programmes.
Margins for the entire year has been at 40 percent. Though it is still lower than 44 percent that the company reported last year, but it is on the back of a new acquisition in the US. The company also expects to prepay or repay the Rs 2,500-crore debt that it has on its books in the next two-three years.
KK Singh, CMD, Rolta India told CNBC-TV18 that the company‘s margin are high. "It is due to change in business model," he said. The company has changed the model from service centric company to a service solution centric company.