Rolta India held a conference call to discuss third quarter results for FY09 and future prospects. Mr Hiranya Asher, Director – Finance, addressed the call.
Highlights of the call
- The management is seeing delay in ramp up of deals. However, there have been no cancellations. There is however expansion in pipeline. There has been price cuts to the tune of 6-8%.
- The management expects next 2 quarters to be challenging.
- In the 3 segments, GIS is stable due to long term contracts, government contracts and defense contracts. The Engineering Design and Enterprise ICT segment are challenging. EICT segment saw volume decline of 4-4.5% and pricing decline was 8% on sequential basis. EICT revenues are down 20% excluding Piocon and exchange gain. EDA segment revenues were down 18% sequentially.
- For FY09, on consolidated basis, the company has lowered its guidance of operating revenues at Rs 1360 – 1375 crore to Rs 1480 – 1500 crore growth of 26.8 – 28.2% over FY08 and PAT guidance of Rs 255 – 265 crore against earlier guidance of Rs 325-330 crore (before MTM losses or gains), growth of 10.6 – 14.9% over FY08. This includes amortization of forex losses of Rs 25 crore (for FCCB at Rs 50.95/US$). FY09 EPS on current equity of Rs 161.01 crore is guided at Rs 15.8 – 16.
- As per the guidance, Q4FY09 would have revenues of Rs 320 – 335 crore against revenues of Rs 321.11 crore in June 2008 quarter and bottomline of Rs 37.40 – 47.40 crore against Rs 50.83 crore in June 2008 quarter.
- The order book was down at Rs 1552 crore from Rs 1590 crore at the end of the sequential quarter executable over 12-18 months: Geospatial Information services Rs 745 crore, Engineering Design services Rs 452 crore and Enterprise – ICT Rs 355 crore. Of the order book: 65% in FY2010 and 10-12% in FY2011.
- In EICT segment, the Company signed a deal with Middle East Oil major. Piocon contributed about US$ 1.8 million for the quarter.
- On the back change in policy regarding reporting of long term foreign currency monetary items, the Company has written back Rs 84.01 crore in the profit & loss account and transferred to Foreign Currency Monetary Items Translation Difference Account. There was amortization of Rs 11.87 crore from the account.
- Capex for FY09 would be Rs 500 crore. The Company has cut down on its capex plan. The Company has put on hold its plans for Kolkata facility on hold. Its Gurgaon facility will come up in 2-3 quarters. For the quarter capex was at Rs 180-190 crore.
- The utilization are lower and the bench is up.
- On sequential basis, Rolta reported 8% dip in operating revenues at Rs 332.03 crore with OPM up 80bps at 35.6%. The reported PAT was up 120% at Rs 133.14 crore whereas the adjusted PAT was down 27% at Rs 61 crore. Depreciation charge was up 20% and staff cost was up 10%. Staff cost was up on account of acquisitions.
- The Thales JV is on RFP stage. The JV would see revenues in FY10.
- There was decline in headcount of about 266 employees in the quarter taking the headcount to 5292 employees. The Company is not replacing attrition.
- Debtor days at the end of the quarter stood at 142 days similar as at the end of sequential quarter.
- Cash in books stands at Rs 249.67 crore. Debt is about Rs 200 crore including ECB. The Company plans to buyback FCCB. Currently, FCCB stand at US$ 150 million.
- The Shaw JV contributed slightly less than US$ 6 million. The order book stands at US$ 16.5 million.