Mehabe score: 1 G Factor: 2 Piotski Score: 6 The stock has a rating SELL. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 2 and Piotski score of 6.
Description
Rolta India Ltd is an Indian IT company that is engaged in providing IT-based solutions for supporting digital GeoSpatial solutions, designing and creating integrated enterprise IT Infrastructure and applications, or creating enterprise-wide BI and Big Data Analytics solutions to serve Defence and Security markets. Its spread over 40 locations across India, North America, Europe, the Middle East, and Australia. Site:ROLTA Main Symbol:ROLTA
Stock trades at 6.0, below its 50dma 6.07 and below its 200dma 6.1. The stock remains bearish on technicals
The 52 week high is at 10.12 and the 52week low is at 3.80
Price Chart
P/E Chart
Sales and Margin
Strengths
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Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -24.31% over past five years.
-Promoter holding is low: 2.31%
-Contingent liabilities of Rs.1132.63 Cr.
-Debtor days have increased from 90.50 to 142.15 days.
-Promoter holding has decreased over last 3 years: -22.77%
Competition
– The industry trades at a mean P/E of 32.5x. Tata Elxsi trades at the industry’s max P/E of 106.46x. ROLTA trades at a P/E of x
– Industry’s mean G-Factor is 3.1 while the mean Piotski score is 9.0. ROLTA has a G-Factor of 2 and Piotski scoreof 6.
– Average 1 month return for industry is 4.6%. The max 1- month return was given by Tata Elxsi: a return of 21.96 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 7.0 cr compared to Rs 274.0 cr for period ended Dec 2020, a fall of 97.4%
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Company reported negative operating profit of Rs -11.0 cr for period ended Dec 2021. For same period last year, operating profit was 10.0.
The EPS for quarter ended Dec 2021 is Rs -4.08 compared to Rs -13.79 for previous quarter ended Sep 2021 and Rs -17.65 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 39.0 cr for period ended TTM vis-vis sales of Rs 944.0 cr for the period ended Mar 2021, a fall of 2320.5%. The 3 year sales cagr stood at -73.8%.
Operating margins shrank to -278.0% for period ended TTM vis-vis -6.0% for period ended Mar 2021, contraction of 27200.0 bps.
Net Profit reported at Rs -1047.0 cr for period ended TTM vis-vis sales of Rs -3264.0 cr for the period ended Mar 2021, rising 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The stock has given a return of 44% on a 1 Year basis vis-vis a return of -4% over the last 3 Years. – The compounded sales growth on a TTM bassis is -97% vis-vis a compounded sales growth of -31% over the last 3 Years. – The compounded profit growth on a TTM basis is 7% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 0.93% vis-vis 0.94% for Sep 2021 – Public shareholding has risen for the period ended Dec 2021. The Dec 2021 public holding stood at 93.56% vis-vis 89.67% for Sep 2021
Conclusion
– – has low interest coverage ratio.
-The company has delivered a poor sales growth of -24.31% over past five years.
-Promoter holding is low: 2.31%
-Contingent liabilities of Rs.1132.63 Cr.
-Debtor days have increased from 90.50 to 142.15 days.
-Promoter holding has decreased over last 3 years: -22.77%
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 6.07 and is trading at 6.0. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
