Rolta Ltd: Result Analysis

Rolta Ltd came out with comparatively good set of numbers for Q3FY12; though the result is a bit of complex when compared on Q-o-Q basis and therefore, we need to read between the lines to get a correct feel of the things. Let me explain the issue to the best of my abilities:

The total income of the company in Q3FY12 came out to be Rs.471.69 Cr as against Rs.441.15 Cr in the same period previous  year (Rs.485.85 Cr in Q2FY12).  

Profit before interest and exceptional items came out to be Rs.99.48 Cr as against Rs.95.49 Cr in the same period previous year--a jump of around 4%, Q-o-Q (Rs.92.35 in Q2Fy12).

Now due to a large interest component, profit before exceptional items and tax fell marginally to Rs.75.28 Cr as against Rs.80.50 Cr in the same period previous year (Rs.73.15 in Q2FY12). 

Also, the profit for Q3FY11 increased due to the one time sell of investments on its JV, which is around Rs.103.65 Cr. Hence this amount has to be subtracted to from the total net profit to compare the net profits of the company on Q-0-Q basis. Now going by this approach we find that the net profit of the company after tax for Q3FY11 comes out to be Rs.50.48 Cr which is much less than what we got in Q3FY12, and which is Rs.65.14 Cr (Rs.62.15 Cr in Q2FY12). 

Now, using the same approach we find that the net profit of the company, after tax, minority interest, and exceptional items came out to be Rs.65.16 Cr as against Rs.50.53 Cr in Q3FY11 (Rs.62.16 Cr).  The the net profit actually increased substantially in Q3FY12 as compared to Q3FY11 and also marginally as compared to Q2FY12.

SO SPEAKING BOTH ON SEQUENTIALLY AND Q-o-Q BASIS THE COMPANY CAME OUT WITH GOOD SET OF NUMBERS. 

Now going further (using the same approach) if we go by the EPS analysis also, we find that the company  is trading cheap and should not trade below Rs.125--150; after giving suitable discounts, because of its business models, which is more or less like a manufacturing company. Hence, I would suggest the investors to stay put in the counter and add the scrip in any dip for an immediate target of Rs.87--92 in the coming days.