Rolta India slumps after foreign research firm issues sell report

Rolta India fell 9.16% to Rs 159.10 at 12:21 IST on BSE after a foreign independent research firm issued a "strong sell" report on the company.

Meanwhile, the BSE Sensex was down 177.87 points, or 0.62%, to 28,621.82.

On BSE, so far 24.22 lakh shares were traded in the counter, compared with an average volume of 8.51 lakh shares in the past one quarter.

The stock hit a high of Rs 176.15 and a low of Rs 155.20 so far during the day. The stock hit a 52-week high of Rs 196.80 on 28 February 2015. The stock hit a 52-week low of Rs 72.40 on 9 May 2014.

The stock had outperformed the market over the past one month till 15 April 2015, rising 3.88% compared with 1.04% rise in the Sensex. The scrip had also outperformed the market in past one quarter, rising 70.21% as against Sensex's 2.58% rise.

The small-cap company has an equity capital of Rs 161.33 crore. Face value per share is Rs 10.

The research firm issued a "strong sell" report on Rolta India, saying the company does not produce free cash flow and cannot repay offshore bondholders without refinancing.

The firm advised investors to sell Rolta's bonds due 2018 and 2019.

The research firm alleged that Rolta has fabricated its reported capital expenditures in order to mask that it has materially overstated its EBITDA (earnings before interest, taxes, depreciation and amortization). It added that Rolta will not be able to repay foreign bondholders because it does not generate free cash flow.

On a consolidated basis, Rolta India's net profit rose 8.14% to Rs 76.56 crore on 9.20% increase in net sales to Rs 966.75 crore in Q3 December 2014 over Q2 September 2014.

Rolta is a leading provider of innovative IT solutions for many vertical segments. By combining its expertise in the IT, engineering and geospatial domains, it develops IP-based cloud-ready solutions to enable its customers globally to readily exploit the power of BI, Big Data Analytics, and IT-OT Fusion. Rolta's GDRs are listed on the main board of London Stock Exchange and its 'Senior Notes' are listed on Singapore Stock Exchange.

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