BackRolta results point to sustained recovery
Rolta results point to sustained recovery
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Most of the business growth came from the enterprise geospatial information solutions segment, which accounts for around 50% of revenue. Income from this segment expanded 26% year-on-year. About half the revenue comes from domestic market, where the defence sector is the largest customer. Other segments of enterprise design and operations and enterprise information technology (IT) solutions have also grown.
Analysts are optimistic on this mid-cap IT firm since the December quarter as billing rates in overseas markets for all the three segments have been improving. The firm operates across 40 countries, with emerging markets such as Asia and West Asia accounting for around 65% of its revenue.
What is important is that the company is back on track with operating profit margin reaching pre-slowdown levels of around 38% of sales. One of the reasons is that staff costs as a percentage of sales during the quarter were lower at 31% of sales, compared with around 45% of sales in the year-ago period. Operating profit grew by 40% to Rs149.9 crore. Sequentially, however, it grew by 5%.
However, the net profit was lower year-on-year due to exceptional items in the year-ago period, where there was a notional gain of around Rs84 crore on revaluation of foreign currency convertible bonds. Rolta’s shares closed around 2.7% higher at Rs197.15 each on Tuesday. There has been optimism in the counter following the OneGIS acquisition. Rolta is among the mid-cap IT stocks preferred by analysts for its focused growth, although valuations are high.
Write to us at marktomarket@livemint.com
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