The Union Budget 2001-2002 has liberalised the restrictions for overseas acquisitions by the IT sector. This has acted as a shot in arm for SSL. The company will be able to acquire US software entities whose valuations have been falling of late. One of the possible targets could be Spinway eBusiness Solutions Inc, USA, in which it has already bought a stake worth $2 million through purchase of 8,333,333 shares of Series B Preferred Stock.

Acquisition, particularly in the US, leaves better opportunity for revenue growth as it is a fast growing e-commerce market. Current US e-commerce revenue is estimated at $55 billion, growing at the rate of 45 per cent per annum. Even, the ratio of e-commerce revenue to GDP stands at 2.36.

In comparison, European markets are still in a nascent stage and e-commerce revenue in this region has a negligible contribution to GDP. Also the rate of Internet penetration in the US is very high, nearly 50 per cent of total population. The figure stands at nearly 25 per cent in the European region.However, the data does not undermine the future potential of the European market. In fact, SSL managing director B Ramaswamy is quite optimistic. According to him, a rise in business from Europe is expected to compensate for loss of business in the US.

Rolta India
Rolta's performance for the year ended December 2000 has been good considering the slowdown of the US economy. This should give its shareholders something to cheer about.

On the back of a 42.6 per cent rise in turnover to Rs 253.2 crore, net profit jumped up by 50.9 per cent to Rs 90.9 crore. Bottomline would have been even higher, had there been no additional depreciation. The company has changed the method of charging depreciation with respect to the computer plant and related equipment from straight line method to written down value method. This reduced the profit by Rs 12.35 crore.

Other income for the year was slightly higher at Rs 1.36 crore (Rs 1.02 crore). Shareholders have been rewarded for better performance with higher dividend of 27.5 per cent as against 25 per cent.

In the year 2000, the company launched design and detailed engineering services for power and process industries, and services for the Windchill platform as PTC's worldwide enterprise, consulting partner. The company has also reported that over the past two years, the company has focussed on the Internet and e-services areas.

Roltanet, a division of the company has been ranked as Mumbai's no 1 ISP by independent agencies. A world class Internet Data Centre for high-tech server co-location has been set up in addition to the launch of RoltaDirect-high speed broadband access service, during the year. The Company has launched solutions and services for e-commerce market, in partnership with IBM, tied up with NAI for e-security and with CA for e-security and network management services.

Just before the announcement of the results, the share price of Rolta was hovering around Rs 80 mark, reflecting the meltdown of new economy stocks.

Laxmikant Khanvilkar & Manish Joshi