The results underscore a company in severe distress, with no revenue generation across the past eight quarters and an operating structure that continues to burn cash. The stock's technical indicators paint a similarly grim picture, with a mildly bearish trend and the price trading below all key moving averages. With institutional holdings at a mere 1.88% and promoter stake at just 2.31%, Rolta India represents a cautionary tale of corporate decline in India's technology sector.
Financial Performance: A Company Without Revenue
Rolta India's Q2 FY26 results reveal a business that has ceased generating revenue entirely. Net sales stood at zero for the seventh consecutive quarter, a stark reality that has persisted since at least March 2024. Despite this complete absence of top-line activity, the company continues to incur substantial operating expenses, resulting in an operating loss (before other income) of ₹4.21 crores for Q2 FY26—the worst performance in the trailing eight quarters.
| Quarter | Net Sales (₹ Cr) | Operating Loss (₹ Cr) | Other Income (₹ Cr) | Net Loss (₹ Cr) | QoQ Change |
|---|---|---|---|---|---|
| Sep'25 | 0.00 | -4.21 | 2.72 | -8.68 | ▼ 30.92% |
| Jun'25 | 0.00 | -1.83 | 2.38 | -6.63 | ▲ 18.39% |
| Mar'25 | 0.00 | -2.00 | 3.86 | -5.60 | ▲ 21.57% |
| Dec'24 | 0.00 | -3.16 | 3.64 | -7.14 | ▼ 12.09% |
| Sep'24 | 0.00 | -2.23 | 3.50 | -6.37 | ▲ 8.48% |
| Jun'24 | 0.00 | -2.77 | 3.40 | -6.96 | ▲ 99.30% |
| Mar'24 | 0.00 | -2.54 | 8.98 | -995.75 | — |
The only source of income keeping the company afloat is other income, which contributed ₹2.72 crores in Q2 FY26, up 14.29% from ₹2.38 crores in Q1 FY26. However, this non-operational income source has proven insufficient to offset the combined burden of employee costs (₹0.41 crores), interest expenses (₹0.19 crores), and depreciation charges (₹7.00 crores). The result is a pre-tax loss of ₹8.68 crores for the quarter, with zero tax liability due to accumulated losses.
On a half-yearly basis (H1 FY26), Rolta India accumulated losses of ₹15.31 crores, compared to ₹13.33 crores in H1 FY25, representing a 14.85% deterioration year-on-year. The company's inability to generate any revenue whilst maintaining operational infrastructure raises fundamental questions about business viability and strategic direction.
Balance Sheet Crisis: Negative Net Worth and Eroding Assets
Rolta India's balance sheet as of March 2024 reveals a company with severely negative shareholder funds of ₹10,155.25 crores, comprising share capital of ₹165.89 crores offset by accumulated reserves and surplus of negative ₹10,321.14 crores. This negative net worth position translates to a book value per share of negative ₹616.67, indicating the company has destroyed shareholder capital many times over its equity base.
Critical Balance Sheet Concerns
Negative Shareholder Funds: At ₹10,155.25 crores negative, the company has no equity cushion. Current liabilities of ₹12,900.27 crores far exceed total assets, creating a severe solvency risk. Fixed assets have declined from ₹5,322.13 crores in FY19 to ₹975.66 crores in FY24, suggesting asset liquidation or impairment.
The company's current liabilities stood at ₹12,900.27 crores as of March 2024, including trade payables of ₹405.95 crores and other current liabilities of ₹1,744.52 crores. Against this, current assets totalled just ₹330.33 crores, creating a massive working capital deficit. The only positive aspect is the absence of long-term debt, though this is overshadowed by the negative equity position.
Fixed assets have declined precipitously from ₹5,322.13 crores in FY19 to ₹975.66 crores in FY24, a 81.66% reduction that suggests either significant asset impairments or disposals. The company maintains no investments as of March 2024, having liquidated the modest ₹5.95 crores it held in March 2021. Cash flow from operations turned marginally positive at ₹9.00 crores in FY24, but this was entirely driven by working capital adjustments rather than operational improvements.
Return Metrics: Zero Returns on Negative Equity
Rolta India's profitability metrics paint a picture of complete capital destruction. The company's average return on equity stands at 0.0%, though this figure is rendered meaningless by the negative shareholder funds. With negative book value, calculating meaningful ROE becomes impossible—the company is essentially operating with no equity base.
The average return on capital employed registers at negative 8.07%, indicating that the company destroys value on the limited capital it deploys. The latest ROCE figure deteriorated further to negative 16.69%, double the average rate of capital destruction. These metrics underscore a business model that has comprehensively failed to generate returns for any stakeholder.
Five-Year Performance Collapse
Rolta India's five-year sales growth stands at negative 100.00%, reflecting the complete cessation of revenue-generating activities. The company generated ₹2,161.00 crores in revenue in FY19 but has declined to zero by FY24. Operating margins collapsed from positive 4.1% in FY19 to negative 417.6% in FY23, whilst PAT margins deteriorated from negative 169.2% to negative 5241.2% over the same period.
Peer Comparison: Lagging Every Metric
Within the Computers - Software & Consulting sector, Rolta India occupies the weakest position across virtually all parameters. With a market capitalisation of just ₹32.00 crores, it ranks fifth among its peer group, trailing companies like Accedere and Hypersoft Technologies by substantial margins.
| Company | P/E (TTM) | ROE (%) | Debt to Equity | Price to Book |
|---|---|---|---|---|
| Rolta India | NA (Loss Making) | 0.0% | -1.03 | -0.00 |
| Accedere | 280.08 | 3.37% | 0.01 | 9.23 |
| Hypersoft Tech. | 18.75 | 2.52% | -0.06 | 2.36 |
| Mudunuru | NA (Loss Making) | 0.0% | -1.76 | -19.08 |
| USG Tech | NA (Loss Making) | 0.0% | 0.09 | 0.98 |
Whilst Rolta India shows a debt-to-equity ratio of negative 1.03 (technically indicating a net cash position due to negative equity), this metric is misleading given the company's insolvency. Profitable peers like Accedere demonstrate ROE of 3.37% and trade at positive price-to-book multiples, highlighting the chasm between Rolta India and functional businesses in the sector.
Valuation Analysis: Distressed Asset Trading
Rolta India's valuation metrics are largely non-applicable given its loss-making status and negative book value. The P/E ratio cannot be calculated for a consistently loss-making entity, whilst the price-to-book value of negative 0.00x reflects the market's assessment that the company has no intrinsic value. The EV/EBITDA multiple of negative 963.36x and EV/EBIT of negative 270.28x are mathematical artefacts of negative earnings rather than meaningful valuation indicators.
The company's overall valuation grade is classified as "RISKY" by proprietary assessment frameworks, a designation it has held since April 2023 with brief interruptions. At the current price of ₹1.89, the stock trades 56.25% below its 52-week high of ₹4.32 but only 11.18% above its 52-week low of ₹1.70, suggesting limited downside protection despite the steep decline.
The company last paid a dividend of ₹3 per share in September 2015, over a decade ago. With accumulated losses and no prospect of profitability, dividend resumption appears impossible. Investors are essentially speculating on restructuring potential or asset value rather than investing in a going concern.
Shareholding Pattern: Minimal Promoter Commitment
Rolta India's shareholding structure reveals extraordinarily low promoter commitment, with promoter holdings at just 2.31% across the past five quarters. This minimal stake, unchanged since at least September 2024, suggests promoters have either divested substantially or never maintained significant ownership. Key promoters include Kamal K Singh (0.52%), Kamal K Singh as Trustee of Singh Family Foundation (0.39%), and various family members and group entities holding fractional percentages.
| Quarter | Promoter % | FII % | MF % | Other DII % | Non-Institutional % |
|---|---|---|---|---|---|
| Sep'25 | 2.31% | 0.00% | 0.00% | 1.88% | 95.80% |
| Jun'25 | 2.31% | 0.00% | 0.00% | 1.88% | 95.80% |
| Mar'25 | 2.31% | 0.00% | 0.00% | 1.88% | 95.80% |
| Dec'24 | 2.31% | 0.00% | 0.00% | 1.88% | 95.80% |
| Sep'24 | 2.31% | 0.00% | 0.00% | 1.88% | 95.80% |
Foreign institutional investors hold no stake in the company, whilst mutual funds similarly maintain zero exposure. Other domestic institutional investors hold a modest 1.88%, unchanged across five quarters. The overwhelming majority—95.80%—comprises non-institutional shareholders, likely retail investors trapped in a declining asset. The complete absence of institutional interest underscores the investment community's assessment of Rolta India as uninvestable.
Positively, there is no promoter pledging, though with such minimal promoter holdings, this provides little comfort. The stagnant shareholding pattern across multiple quarters suggests no meaningful buying or selling activity, indicating a stock largely abandoned by informed investors.
Stock Performance: Catastrophic Wealth Destruction
Rolta India's stock performance across all timeframes represents one of the most severe wealth destruction stories in Indian equities. Over the past year, the stock has declined 47.79%, massively underperforming the Sensex's 9.50% gain by 57.29 percentage points. The stock's current price of ₹1.89 reflects a 49.73% year-to-date decline, compared to the Sensex's 8.72% gain—an alpha of negative 58.45%.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | -4.06% | +1.69% | -5.75% |
| 1 Month | +3.28% | +1.19% | +2.09% |
| 3 Months | -12.50% | +5.40% | -17.90% |
| 6 Months | -26.74% | +3.18% | -29.92% |
| YTD | -49.73% | +8.72% | -58.45% |
| 1 Year | -47.79% | +9.50% | -57.29% |
| 3 Years | -51.91% | +37.57% | -89.48% |
| 5 Years | -55.53% | +93.28% | -148.81% |
| 10 Years | -98.04% | +228.45% | -326.49% |
The longer-term picture is even more devastating. Over three years, the stock has fallen 51.91% whilst the Sensex gained 37.57%—a negative alpha of 89.48 percentage points. The five-year performance shows a 55.53% decline against the Sensex's 93.28% gain, whilst the 10-year chart reveals a catastrophic 98.04% wealth destruction compared to the Sensex's 228.45% gain—a staggering negative alpha of 326.49 percentage points.
Within its sector, Rolta India has underperformed by 31.00 percentage points over the past year, with the Computers - Software & Consulting sector declining 16.79% compared to Rolta's 47.79% fall. The stock's beta of 1.50 indicates it is 50% more volatile than the broader market, though this high beta has worked entirely against shareholders given the consistent downward trajectory.
"Over the past decade, Rolta India has destroyed 98% of shareholder wealth whilst the Sensex has more than tripled—a divergence that speaks to fundamental business failure rather than market cycles."
Investment Thesis: A Company Without a Business
Rolta India's investment thesis, if one can call it that, rests entirely on speculation about potential restructuring, asset monetisation, or corporate actions rather than any fundamental business prospects. The company's proprietary Mojo score stands at 9 out of 100, firmly in "STRONG SELL" territory—a rating it has maintained since May 2024 when it was downgraded from "SELL" at ₹5.67.
The four key parameters of the Mojo assessment framework all point to severe distress. The near-term drivers are negative, with quarterly financial trends deteriorating and technical indicators mildly bearish. Quality assessment grades the company as "BELOW AVERAGE," a generous characterisation given the negative net worth and zero revenue generation. Valuation is classified as "RISKY," whilst the overall assessment remains "CAUTIOUS"—though even this descriptor understates the severity of the situation.
From a technical perspective, the stock trades below all major moving averages—5-day (₹1.97), 20-day (₹1.88), 50-day (₹1.93), and 100-day (₹2.12)—indicating consistent selling pressure across all timeframes. The MACD shows mildly bullish signals on a weekly basis but remains bearish monthly, whilst Bollinger Bands indicate bearish trends across both weekly and monthly periods. The overall technical trend is classified as "MILDLY BEARISH," having oscillated between bearish and mildly bearish states throughout August 2025.
Key Strengths & Risk Factors
Key Strengths ✓
- Zero Debt Position: The company maintains no long-term debt, eliminating immediate solvency pressure from creditors, though this is overshadowed by negative equity.
- No Promoter Pledging: The minimal promoter holdings are unpledged, indicating no immediate forced selling risk from margin calls.
- Positive Operating Cash Flow (FY24): Generated ₹9.00 crores in operating cash flow in FY24, though this was driven by working capital adjustments rather than operational improvements.
- Other Income Stream: Continues to generate ₹2.72 crores quarterly from other income, providing minimal liquidity to fund ongoing expenses.
- Established Brand Legacy: Historically recognised in geospatial and IT solutions, though this legacy value has eroded substantially.
Key Concerns ⚠
- Zero Revenue Generation: No sales for seven consecutive quarters, indicating complete cessation of business activities and customer relationships.
- Negative Net Worth: Shareholder funds of negative ₹10,155.25 crores with book value per share of negative ₹616.67 indicate technical insolvency.
- Deepening Losses: Q2 FY26 loss of ₹8.68 crores represents 30.92% QoQ deterioration, with no path to profitability visible.
- Minimal Promoter Stake: Just 2.31% promoter holding signals lack of management commitment and alignment with minority shareholders.
- Zero Institutional Interest: Complete absence of FII and mutual fund holdings indicates professional investors have abandoned the stock.
- Asset Base Erosion: Fixed assets declined 81.66% from FY19 to FY24, suggesting substantial impairments or liquidation.
- Negative Return Metrics: ROCE of negative 16.69% and ROE of 0.0% indicate complete capital destruction with no prospect of recovery.
Outlook: What to Watch
Potential Catalysts
- Restructuring Announcement: Any corporate action, debt restructuring, or strategic sale could provide exit opportunities for trapped shareholders.
- Asset Monetisation: Sale of remaining fixed assets worth ₹975.66 crores could unlock some value for creditors and shareholders.
- Revenue Revival: Resumption of any business activity or customer contracts would signal operational viability, though this appears highly unlikely.
- Promoter Buyback: Increased promoter stake through open market purchases would demonstrate management confidence, though current 2.31% holding suggests otherwise.
Red Flags to Monitor
- Further Loss Acceleration: If quarterly losses exceed ₹10 crores consistently, remaining liquidity could evaporate rapidly.
- Creditor Action: With current liabilities of ₹12,900.27 crores against minimal assets, creditor-initiated insolvency proceedings remain a material risk.
- Promoter Exits: Any reduction in the already minimal 2.31% promoter stake would signal complete abandonment by management.
- Delisting Risk: Failure to meet minimum public shareholding or trading requirements could trigger regulatory delisting.
- Asset Impairments: Further writedowns of the ₹975.66 crores in fixed assets would eliminate remaining book value.
The Verdict: A Company Beyond Redemption
Score: 9/100
For Fresh Investors: Avoid entirely. With zero revenue, negative net worth of ₹10,155 crores, and no credible path to recovery, Rolta India represents capital at extreme risk. The minimal 2.31% promoter stake and complete absence of institutional interest underscore that informed investors have long abandoned this stock.
For Existing Holders: Exit at any available price. The 47.79% one-year decline and 98.04% ten-year wealth destruction reflect fundamental business failure rather than temporary cyclical weakness. With quarterly losses deepening to ₹8.68 crores despite zero operating expenses, remaining liquidity will eventually exhaust. The stock's classification as "RISKY" valuation, "BELOW AVERAGE" quality, and "NEGATIVE" financial trend leaves no rational basis for continued holding.
Fair Value Estimate: Not calculable given negative equity and zero revenue. Current price of ₹1.89 likely overvalues remaining assets after creditor claims.
Note: ROCE = (EBIT - Other Income) / (Capital Employed - Cash - Current Investments)
⚠️ Investment Disclaimer
This article is for educational and informational purposes only and should not be construed as financial advice. Investors should conduct their own due diligence, consider their risk tolerance and investment objectives, and consult with a qualified financial advisor before making any investment decisions. The views expressed are based on publicly available information and the author's analysis, and do not constitute a recommendation to buy, sell, or hold any securities.
