MY VIEW

ROLTA – Indian Roots, Global Wings

By Sarang Wadyalkar

Summary
The recent global economic crisis affected Indian IT companies in myriad ways,
making them rethink and restrategise their business approaches. Most of them
have emerged successful in the aftermath of the downturn. Through this period of
critical business transformation, it is observed how every major company is trying
to reposition itself. With a focus on
innovative IT solutions in the The global economic downturn
manufacturing space, ROLTA is in a has caused a major transformation in
different league altogether. In manufacturing industry deliverables

challenging times ROLTA performed from Indian IT companies.

reasonably well. Using specialized, It is observed that IT majors have

different from “me-too” knowledge, they begun to change and deliver newer

have always looked beyond immediate business propositions; continuous

transformation has helped Rolta to
opportunities and built businesses with
stand out distinctively.
a long term potential, especially in the
manufacturing industry.

Differentiation is the Key

Economic meltdown resulted in slow growth, low revenues, delayed projects,
cancellations and credit crunch. During the first half of the FY 2008-09 (April-
September), the growth of IT sector was affected by factors like increasing margin
pressure due to wage inflation and losses by a number of companies on their
foreign exchange transactions, and volatility in the exchange rates. In the second
half of 2008-09 the domestic revenues of the IT companies suffered on account of
general slowdown in the macro economy, leading to moderation in the overall
activity in the manufacturing and services sector.

Now is the time for them to reposition themselves in the market. They must now
build newer delivery capabilities to overcome the limitations of existing models of
business. While this model helped Indian companies pluck low-hanging fruits
earlier, now as they chase larger deals they must begin to differentiate
themselves. So far, all the big players have been offering similar services, such as
application development and maintenance, package implementation, and testing.
But now, to stand out in a commoditized business, they must emphasize their
unique strengths.

TCS looks to rival IBM and Accenture with a large global presence. It has a good
combination of depth and breadth of offerings. Infosys stresses on newer lines of
businesses. Infosys’ strength lies in long-standing industry focus across the
enterprise. The challenge for Infosys lies in evolution towards diversified
solutions. Wipro has large presence in outsourced R&D market, semiconductor
industry, aspiring to be a total solutions provider. Wipro’s strength lies in being an
aggressive investor and adopter of integrated offerings. HCL was smart to invest
early in IT infrastructure and remote applications management. All these players
provide almost similar business applications/services or mostly newer versions of
existing solutions. They seem to focus less on innovative solutions in
manufacturing industry and this is where Rolta steps in and the difference is
visible. In challenging times ROLTA has been able to perform reasonably well.
Using specialized, different from “me-too” knowledge, they have always looked
beyond immediate opportunities and built businesses with a long term potential,
especially in the manufacturing industry.
Rolta has special deliverables in major sectors like oil & gas, petrochemical &
refining, conventional power, and nuclear power which are a large and integral
part of a fast developing economy, such as India. Rolta is squarely positioned to
take advantage of the infrastructure spending growth in India. Besides strong
local presence, Rolta has world class applications which it has invented through
new ideas, which have worked and proven immensely useful in meeting
challenges of global players in the fields of process engineering and
manufacturing industry. The areas it has a strong presence in are Feasibility
Studies, Process Structural Plant Design, Piping, Software System Deployment,
Technical Information Management, and Plant Operations Management.

Leveraging India’s Growth Potential and Mitigating Currency Risks:

Volatility of the Indian Rupee had both positive and negative impact on the IT
industry in fiscal 2009. Few companies, such as TCS used various types of Foreign
Currency Forward and Options Contracts to hedge the risks associated with
fluctuations in these currencies. Rolta on the other hand seems to be balancing
out quite intelligently as their local and overseas business ratio is almost 50:50.
Unlike most Indian IT companies, Rolta has one of the highest revenue
contributions from the domestic market. This strategy significantly differentiates
it from peers, who derive the bulk of their revenues from the export market.
Rolta’s strategy not only leverages India’s growth potential, but also mitigates any
currency fluctuations.

Aligning for Growth

One of Rolta’s strengths lies in forging alliances with key players in various
domains. Stone & Webster Rolta Ltd (SWRL), the 50:50 JV, offers integrated
project services that include engineering, design, procurement services and
construction management. Rolta has 51:49 JV with the Thales Group to help Rolta
develop state-of-the-art C4ISTAR information systems, for both the domestic and
international markets. C4ISTAR is simply an ERP for the military sector. Another
partner, Intergraph’s software enables Rolta to create intelligent maps; manage
assets and infrastructure; build and better manage plants and ships, and dispatch,
command and control emergency services.

Opportunities
Rolta is well established to benefit from India’s advancement of nuclear program
and the Indo-US nuclear deal. Rolta’s JV with one of the leading nuclear power
plant subcontractors – Stone & Webster acts as a price catalyst for Rolta shares.
Rolta is expected to be one of the major beneficiaries of the offset clauses in the
Defense Procurement Procedure policy document. Under the offset clause, all
foreign vendors must source from India one-third of the price of all defense
equipment worth over $67 million. Thales is one of the leading contractors for the
Indian defense in the area of complex command-control systems used by the
military. If Thales wins big orders from the Indian State, it is likely to meet its
offset obligations by subcontracting to its JV with Rolta. Any spurt in defense
spending should thus be a gain for Rolta.
In India, both conventional power generation and refining capacities are expected
to double. The State has raised the nuclear power target to 40,000MW by 2030.
Rolta is uniquely positioned to capitalize the huge opportunities in the power
sector, by leveraging its well established presence and the joint venture it has
with The Shaw Group. The Indian Defense and Homeland Security sector has an
expected capex of over $50 billion in the next five years. Rolta is addressing huge
opportunities arising from the key modernization programs of the Indian Armed
Forces, such as Battlefield Management Systems, Tactical Communication
Systems, and the Digital Soldier System Programs. The outsourcing of engineering
services is expected to cross $60 billion by 2020. Rolta’s global footprint and track
record along with its capable off-shoring model positions it uniquely in this large
market.
 Unique Offerings
Rolta has come up with unique offerings, which are powerful tools for leading
decision makers. Rolta’s TM Geospatial Fusion is one such solution which enables
instantaneous fusion of various disparate geospatial & non-spatial databases and
software applications for generating real-time reports and immediate decision-
making, thereby increasing exponentially, a large organization's ability and speed
to access, analyze, plan, allocate and monitor resources at all levels. In an
emerging economy, such as India, large investments in core infrastructure are
expected to create and drive tremendous demand for Photogrammetry and
imaging technologies and geospatial data, as these will be required and play an
important role for the nation's development.

About Rolta
Rolta envisions itself to be the preferred choice for providing knowledge-based IT
solutions through pioneering efforts to meet market demands.
Rolta has successfully executed projects worldwide. Over the last two decades
Rolta has transformed its businesses and offered unique combinations, in the
Engineering Design Automation, Geospatial and Defense business segments. Rolta
constantly reinvents itself and yet remains focused on its core competencies. This
is the fundamental reason for its long-term success and recognition, globally.
Forbes Global has ranked Rolta among the “Best 200 under a Billion” four times in
six years. Standard & Poor's included Rolta in the S&P Global Challengers List™
2008. Rolta has cutting-edge technology and Intellectual Property Rights (IPRs)
to launch innovative solutions for its market segments, worldwide. This enables it
to meet the most demanding mission critical requirements of the segments it
serves worldwide.

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