Mumbai: IT firm Rolta India Ltd sees sales rising 12-15% in FY10 riding an investment revival in India, even though the growth may be slower than last year on the global economic downturn, a company official said.
Operating margins are seen at 33-35 for the year ending June 2010, from about 33% last year, as Rolta’s cost control measures pay off, Rolta’s director finance and chief financial officer, Hiranya Ashar, told Reuters late on Monday.
“Last year’s 28% growth is a combination of organic and inorganic growth. This year it will be purely organic.”
Mumbai-based Rolta, which offers geospatial information systems (GIS), engineering services and enterprise software, posted revenue of Rs1,370 crore last year. Its acquisitions last fiscal included US-based Piocon Technologies.
The global economic crisis has put the brakes on the Indian IT sector’s scorching pace of growth as many clients struggle to stay afloat or are bankrupt due to the slowdown, leaving little room to boost technology spending.
“Outside of india, things are still difficult. Things are still challenging. The recovery is still far, at least a couple of quarters away,” Ashar said in a telephonic interview.
However, in India, which brings in 55% of revenue, the situation was much better, he said.
“The government is in place. They have a mandate in place,” he said. “With the change of government and elections, there was no major activity in terms of contracts being awarded. Now that activity is starting.”
India, in May, gave a decisive victory to the Congress-led ruling coalition in a month-long general elections.
Rolta was eyeing public and private spending in defence, infrastructure, homeland security, power and telecom, where it could boost its orderbook, Asher said.
Rolta’s order book as of end-June was Rs1,600 crore, with about three-fourths of this executable in 2009-10, he said. GIS orders comprised more than half of the order book, engineering services a fourth and enterprise services bringing in the rest.
“We have a pretty good visibility going into FY10 and with this visibility and the new order flow expected in the next few months,” Ashar said. “In terms of more bookings and more revenue, we see quarter two and three much better.”
The company was targetting to bid for a near-time order pipeline of about Rs5,000 crore in India, he added.
In an effort to bag more contracts in India, especially in defence, Rolta will invest Rs3 billion in a facility in Gurgaon, near Delhi. This unit is set to open by December and will be used to showcase the company’s solutions, he added.
Engineering services revenue, which fell nearly 13% in the June quarter, is expected to stabilize in 2009-10 going by the current order backlog, he said.
Rolta’s billing rates, which were lowered by 5-6% on an average in the just-ended quarter, too are likely to remain stable with no major price cuts likely in the current fiscal year, he added.
So far this year, Rolta shares have risen by more than a third, underperforming BSE IT index’s over 75% jump in the period.