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Certainly not bottom fishing candidate

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Rolta India Ltd.

BSE Code/NSE: 500366/ROLTA | Face Value: Rs10 | CMP: Rs6.09 | 52 Weeks H/L (Rs): 62.35/3.65 | Market Cap Rs(crore): 103 | Promoter’s Holding: 21.50%

Incorporated in 1992, Rolta India Ltd. is a leading provider of innovative IT solutions for many vertical segments, including Federal and State Governments, Defense and Homeland Security, Utilities, Process, Power, Financial Services, Manufacturing, Retail, and Healthcare. The company operates in two segments, Enterprise Geospatial and Engineering Solutions, and System Integration and Enterprise IT Solutions. These enterprise level solutions are built around Rolta’s intellectual property and domain expertise to offer unique business intelligence for impactful insights for effective decision making.

Once upon a time this was a darling stock for traders and investors. Its price went up to Rs500+ level in FY2000, again went up to Rs395 level in FY07. Now it is available near Rs7.5. Many investors feel that it is throw away price but as per financial analysis it is not cheap stock even at this price.

Just look at its financial. It has an equity base of Rs165.89 crore. As on FY18, reserve was around Rs2323.20 crore and Debt was above Rs5000 crore. Current market cap is just Rs120 crore. The Company has debt above Rs5000 crore in its book which is horrible.
Now look on its last FOUR year’s financial numbers.

The Company has reported poor performance since last five years. Its sales and PAT came down every year since FY15 and in this period its interest cost going higher and higher. It has paid 30% plus in interest from its total revenue. Lenders sold pledge shares between April-December 2018. On 1st April 2018, the Promoter’s stake was around 50.4% which now remains just 21.5% as on 31st December 2018.

Some investors have still hope from this company but looking at its financial performance our advice is don’t try bottom fishing adventure in this stock.

Certainly not bottom fishing candidate 1

About the author: IE&M Team

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