Rolta India dips on weak Q4 results; credit rating downgrade

The stock dipped 9% to Rs 71 on the BSE after reported 13.7% QoQ decline in net sales at Rs 846 crore in March quarter.

Rolta India has dipped 9% to Rs 71.25 on the BSE after the company reported 13.7% quarter on quarter (QoQ) decline in consolidated net sales at Rs 846 crore for the quarter ended March 2016 (Q4FY16). The information technology company had net sales of Rs 981 crore in December 2015 quarter.

Consolidated profit however rose 26% to Rs 59 crore on QoQ basis, mainly due to lower depreciation and amortization expenses.

The depreciation and amortization expenses declined 89% to Rs 19 crore in March quarter from Rs 170 crore in December quarter.

Meanwhile, the rating agencies S&P Global Rating and Fitch Ratings cut the company's credit score.

Further, S&P Global Ratings on Monday lowered its long-term corporate credit rating on Rolta India to 'CCC-' from 'B+'. At the same time, the credit rating firm lowered its long-term issue rating on the senior unsecured notes that Rolta Americas and Rolta issued to 'CCC-' from 'B+'. Rolta guarantees the notes.

“Rolta missed its interest payment due on May 16, 2016, on its 10.75% 2018 unsecured notes. We are uncertain of the company's ability to meet this payment within the 30-day grace period that extends until June 14, 2016. We are placing the ratings on CreditWatch with negative implications to reflect the prospect of a further downgrade if Rolta fails to make the payment within the grace period,” S&P Global Rating said in a statement.

On Friday, Fitch Ratings too had downgraded Rolta India's Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) and senior unsecured class rating to 'CC' from 'B'.

At 12:27 PM, the stock was down 7% at Rs 73 on the BSE compared to 0.22% fall in the S&P BSE Sensex. A combined 2.4 million shares changed hands on the counter so far against an average sub one million shares that were traded daily in past two weeks on the NSE and BSE.