Ricoh India Stock Falls into ‘Z’ Category as Co Sees Turbulence
ET Intelligence Group: Shares of RicohIndia,havefallen25%inthelast six sessions after the stock was classified as ‘Z’ category by the BSE after it failed to declare quarterly results.
The office equipment and services firm, which was the darling of the Street until a few months ago, is now facing several issues. To begin with, it has not declared its results since the September quarter. Investors were given assurance by the top management that the company was in robust health through a notice on the stock exchanges. Its Japanese parent said in December quarter results, “Overseas IT services expanded on solid performance of Indian operations.”
What added to the shock is that the Indian arm asked three top guys — CEO, CFO and COO — to go on leave, thus creating panic in its stock price.
“In order to ensure, there is a fair verification, some people are asked to go on leave,” said Manoj Kumar, exCEO of Ricoh India who announced his resignation on Monday. He said he has stepped down for personal reasons. “Investors should actually wait for the results to come out which I believe will be out soon,” he said.
Some analysts tracking the company say that there could be a one-time hit on the bottom line but the top line growth should remain intact.
Themanagementhadgivenoptimistic future outlook, a guidance of over 50% growth for FY16 and FY17. Although margins were thin for the hardware business, the fast-growing servicesbusinesswith15-20%margin was expected to improve profitability.
The potential issues could be with the revenue recognition, billing or with the receivables, but one will have to wait for the results to know real reason for the delay.