Almost 55% of your business comes from the domestic market. What is the next big opportunity for Rolta in this market
After the nuclear bill was passed last week, the design and specialised engineering services for the nuclear power plants is expected to be the next big opportunity for us in India. However, this is going to be a long-term strategy as we expect the government to spend about $100 billion over the next 5 to 10 years on nuclear power plant projects. Of this, about 4-5% is expected to be spent on design and other engineering services. We expect the request for proposals (RFPs) to start flowing in over the next six to twelve months. We are better placed to tap this opportunity due to our joint venture with the Shaw Group, that already has experience in setting up nuclear power plants. The Shaw Group has set up about 70% of nuclear power plants in the US and is currently setting up one power plant in China.
At the same time, the defence sector is looking at modernisation of armed forces and this brings us additional opportunity. We are also betting big on the homeland security projects that are expected to come up.
How much of your revenues comes from the private sector How do you see the contract flows in the coming quarters from the private sector
About 60% of our revenues flow from the private sectors including oil & gas, utilities, telecom and power. While 25% comes from defence and 10% from other public sector units. Though oil & gas sector has not completely revived and there are few new plant projects, we are banking on the operational services that we provide to the existing plants. This is largely for our clients based out of the US and Europe. Though we see that the US is becoming better, Europe is still lagging behind while West Asia has recovered. Other sectors are still reviving.
How do you plan to repay FCCBs of $95 million (Rs 427 crore) that will mature in June 2012
We recently did a buyback of $ 56 million (Rs 250 crore). We are also creating a redemption fund of about Rs 150 crore. So we are comfortable and would be doing additional borrowings if required. The increase in loans, during the last quarter by almost $ 10 million (Rs 45 crore) is due to increase in our investments. We have certain plans and we do not wish to slow down R&D. We expect to spend about Rs 150-160 crore in the coming year, and this year we have spent almost Rs120 crore. We have a quarterly cash flow of about Rs 100 crore and so we should be comfortable at the time of repayment of the FCCBs.