Mumbai: Software services firm Rolta India Ltd’s December-quarter consolidated profit more than doubled, helped largely by revenues from the sale of its stake in a joint venture.
However, shares of the company, which have lost 20% of their value in the past six-month, dropped as much as 5% to a 18-month low of Rs130.6 as the results, excluding the extraordinary gain, failed to cheer investors.
They later pared some losses, and were trading down 2.4% at Rs134.45 at 2.50 pm in a weak Mumbai market.
Rolta recently sold its 50% stake in its Shaw Rolta joint venture to partner Stone & Webster, a unit of The Shaw Group, for $35.5 million. The joint venture was formed largely to bid for nuclear projects in India.
As part of the sale, Rolta recorded a gain of Rs104 crore during the quarter and will receive the rest of the amount over the next two-year.
“The joint venture that they have sold off accounted for 9 to 10% of their revenue,” Anand Rathi Securities analyst Naushil Shah said. “So even if other businesses grow, to fill the shortfall of that 10% there is going to be some trouble going forward.”
Operationally, the results were below expectations, Shah said, adding the logical way going forward for the company would be to look for another joint venture partner for it to be able to keep on tapping domestic nuclear business.
The company, which follows a July-June fiscal, posted a consolidated net profit of Rs154 crore, compared with Rs747.7 million a year ago.
Net sales rose 3% to Rs441crore.
A Reuters poll of brokerages had forecast the company to report a net profit of Rs784.5 million on net sales of Rs442 crore.