Rolta India - Stock Coverage

In current turmoil in stock market and not so good outlook for Indian IT industry which sources its revenue mainly from US and somewhat from Europe, the IT stocks are out of flavor. nearly 40% of the revenue comes from BFSI segment which has collapsed.

One stock which stands apart is Rolta India. It is a market leader in providing specialized IT-based solutions toe the geospatial and engineering sectors.Rolta has broadened its engagement and geographic footprint with strategic joint ventures with Stone & Webster and Thales.
It has a near monopoly in the verticals it is playing.
* 70% share of Indian GIS market
* 90% share of Indian EDA market
* 95% share of Indian Defence GeoSpatial market

Rolta provides a full complement of specialized services in the following areas:

Information security, software packaging and testing, ERP consulting and integrated CAD/CAM /GIS services

Animation,modelling, programming, interactive media. and game design solutions

Fully integrated C4ISTAR for armed forces

Global leader in IT-based Geospatial, Engineering Design and information security and defence solution

End-to end geospatial and photogrammetry solutions for diverse applications and industries

Engineering design and automation solution for the energy, ship building and industrial segments

I don't want to give a target price for this stock nor I have a right price for you to enter because I cannot judge the bottom of stocks in current scenario. Logic doesn't follow in fearful market. But if someone wants to be in the IT world in a niche segment which is growing they can take an exposure to this stock.

Rolta India can also benefit from the nuclear deal signed by India. It is aiming to provide engineering design and automation solutions to EPC players. L&T and BHEL are already its clients who are eyeing a huge pie in the nuclear business oppurtunities.

source : rolta india website, hindu business line

Interbank Rate

What is Interbank Rate?
It is the interest charged by one bank to other bank for short term loans. This interest rate is regularly fluctuating based on money availability, demand, current rates, time horizon and other terms.

There are some standard bank rates used as a reference by different banks and other interested parties in the economy.
Eg: LIBOR (London Interbank Offered Rate) , MIBOR (Mumbai interbank offer rate). Indian Banking Association(IBA) has pushed for it to the RBI.
Benchmark rate they say helps eliminate the fuzziness in loan and deposit pricing and usher in more transparency in the entire system.[source : Rupee time]


Why do bank need to borrow when they are themselves lenders?
Banks need to borrow to manage liquidity and meeting various statutory requirements placed by the RBI or other federal agencies.
Banks are required to keep some amount of liquid capital or asset to fulfill the withdrawal requirements of the customers. This is a fixed percentage of the total assets. If their is a temporary shortfall banks need to borrow to meet the liquidity requirements.
The lender bank earns interest on the excess assets lent.

Time to turn the tables?

Indian stock markets are in turmoil, thanks to current situation in the west with US,European Union and Japan facing recession.

Indian markets are classified as emerging markets and hence considered risky!! But are they riskier than the markets(considered developed) where capital is fleeing? Is US treasury bonds more attractive than our desi G-Secs?

We have for long depended on US and Europe for our growth. They grow, they consume so we grow. They provide capital for growth.

Do we need their capital or they need ours truely :) Household savings have increased and domestic market can be kept stable by local consumer demand and huge capital spends on infrastructure. Indian companies are buying abroad creating job oppurtunities or atleast saving the existing jobs abroad. They are providing cash to sick units and turning them around.

Now its time that we provide the support and stabilizing effect to the world finance. Foreign investors, instead of exiting can think this as oppurtunity here. We need to strengthen our markets from fickle incoming/outgoing capital.

In this globalized economy we can find succor locally in our less leveraged economy.