|
|
| India Infoline Research Team / 16:23 , Jul 29, 2010 |
|
|
|
CMP Rs284, Target Rs243, Downside 14.5%
- Wholesale voice revenues rose 18% yoy which drove a 12.6% growth in consolidated Q1 sales
- NLD/ILD volumes have been probably undermined by persistent pricing pressures leading to a 28% yoy decline in global voice EBIT
- A 663bps surge in network costs led to ~5ppts OPM contraction; Data and managed services (formerly enterprise & carrier business) which provides connectivity and other IT solutions to large corporates, however, managed a 5-6% rise in revenues/EBIT
- Poor operating performance and higher interest burden pushed Tata Comm. in to deeper losses compared to year ago levels
- We further lower our loss estimates for FY11/12 based on Q1 showing and retain SELL with a 9 month target price of Rs243
Results table
(Rs m)
|
Q1 FY11
|
Q1 FY10
|
% yoy
|
Net sales
|
28,845
|
25,617
|
12.6
|
Network costs
|
(17,556)
|
(13,892)
|
26.4
|
Operating & other exp.
|
(4,703)
|
(4,790)
|
(1.8)
|
Personnel costs
|
(3,989)
|
(3,356)
|
18.9
|
Operating profit
|
2,598
|
3,580
|
(27.4)
|
OPM (%)
|
9.0
|
14.0
|
(497) bps
|
Depreciation
|
(3,829)
|
(3,247)
|
17.9
|
Interest
|
(1,333)
|
(1,060)
|
25.8
|
Other income
|
159
|
633
|
(74.8)
|
PBT
|
(2,404)
|
(94)
|
2,460.6
|
Tax
|
(245)
|
(330)
|
(25.8)
|
Minority Int/Associates
|
(164)
|
(127)
|
29.4
|
Reported PAT
|
(2,814)
|
(551)
|
410.4
|
Ann. EPS (Rs)
|
(39.5)
|
(7.7)
|
| Source: Company
|
|
|
|
|
|
|
|