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Wednesday, Jul 10, 2002

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Institutions fancy Rolta India scrip

Neha Kapoor

MUMBAI, July 9

SOFTWARE solutions provider Rolta India appears to be a current investor favourite, with both domestic and foreign portfolio investors increasing their holding 4.5 per cent between April and June 2002.

Institutional shareholding in the company has gone up to 6.13 per cent as on June 30, 2002 from 1.63 per cent on March 31, 2002. Of this, Alliance Capital Mutual Fund's Alliance Equity Fund holds 1.26 per cent and Alliance New Millennium Fund holds 1.1 per cent. The holding of UTI and domestic mutual funds has gone up to 4.8 per cent compared to 0.3 per cent quarter to quarter.

Meanwhile, public shareholding has fallen to 37.05 per cent from 41.37 per cent at end-March 2002.

The promoters also reduced their stake in the company marginally to 51.81 per cent (3.30 crore shares) from 52.44 per cent (3.34 crore shares as on March 31, 2002. On the other hand, private corporate bodies marginally picked up stake in the company to 3.59 per cent (3.13 per cent).

Rolta India's total paid-up capital stood at 6.36 crore shares

On the back of increased fund buying, the company's share price has increased by 45 per cent from around Rs 100 on April 1, 2002 to today's close of Rs 145.70. However, active buying in the stock during the April-June quarter took the stock price to a high of Rs 194.

"Rolta's stock is attractive to funds as the company has some strong fundamentals. It operates in a niche segment, offering solutions for CAD/CAM design and Geographical Information System (GIS) and enjoys a leadership position with about a 70 to 80 per cent market share in each of these areas. Also, the company's main stream of revenue comes from the Government sector which means a secure customer base with assured revenues," said Mr Sandeep Shah, Analyst-Equities, Pranav Securities.

"One factor of concern is that Rolta's debtor days are quite high, about six to eight months. However, the interest costs are taken care of as the company enjoys operating margins of over 50 per cent," Mr Shah said. "Another area of concern is that the company clubs inter-department sales under sales turnover," he added.

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