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| India Infoline Research Team / 16:23 , Jul 29, 2010 |
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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)
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Q1 FY11
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Q1 FY10
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% yoy
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Net sales
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28,845
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25,617
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12.6
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Network costs
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(17,556)
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(13,892)
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26.4
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Operating & other exp.
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(4,703)
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(4,790)
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(1.8)
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Personnel costs
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(3,989)
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(3,356)
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18.9
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Operating profit
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2,598
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3,580
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(27.4)
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OPM (%)
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9.0
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14.0
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(497) bps
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Depreciation
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(3,829)
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(3,247)
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17.9
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Interest
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(1,333)
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(1,060)
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25.8
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Other income
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159
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633
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(74.8)
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PBT
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(2,404)
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(94)
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2,460.6
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Tax
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(245)
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(330)
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(25.8)
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Minority Int/Associates
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(164)
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(127)
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29.4
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Reported PAT
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(2,814)
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(551)
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410.4
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Ann. EPS (Rs)
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(39.5)
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(7.7)
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| Source: Company
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