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| India Infoline Research Team / 14:57 , Feb 01, 2011 |
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CMP Rs226, Target Rs245, Upside 8.4%
- Tata Communications posted ~9% rise in Q3 revenues driven by 15% growth in data & managed services; core voice business sales tepid at +2.8% yoy, weighed down, we reckon, by a combination of moderate volume growth and pricing pressures; other income included Rs440mn in reversal of liabilities no longer required
- Standalone revenue growth of 14% yoy also driven by ~35% jump in data revenues
- Control over staff and other opex led to a 14% yoy growth in consolidated EBIDTA
- Strained by Neotel and weak voice performance, Tata Comm posts net loss of ~Rs2bn (vs. Rs2.1bn loss in Q2 FY11)
- Based on 9M consolidated performance, we increase our FY11/12 loss estimates by ~12-13% and maintain Market Performer with a reduced 9-mth target of Rs245 (earlier Rs287)
Results table (consolidated)
| (Rs m) |
Q3 FY11 |
Q3 FY10 |
% yoy |
9M FY11 |
% yoy |
| Net sales |
30,180 |
27,709 |
8.9 |
88,632 |
10.1 |
| Network costs |
(18,198) |
(16,619) |
9.5 |
(53,354) |
16.6 |
| Operating & other exp. |
(4,953) |
(4,645) |
6.6 |
(14,509) |
(0.2) |
| Personnel costs |
(3,911) |
(3,710) |
5.4 |
(12,070) |
13.7 |
| Operating profit |
3,118 |
2,736 |
14.0 |
8,699 |
(9.5) |
| OPM (%) |
10.3 |
9.9 |
46 bps |
9.8 |
(212) bps |
| Depreciation |
(3,865) |
(3,802) |
1.7 |
(11,570) |
9.8 |
| Interest |
(1,494) |
(1,468) |
1.8 |
(4,224) |
9.8 |
| Other income |
690 |
412 |
67.7 |
1,358 |
(4.0) |
| PBT |
(1,550) |
(2,122) |
(26.9) |
(5,736) |
71.0 |
| Tax |
(208) |
2,614 |
- |
(589) |
- |
| Minority Int/Associates |
(216) |
(190) |
- |
(598) |
30.1 |
| Reported PAT |
(1,974) |
302 |
- |
(6,923) |
283.6 | Source: Company, India Infoline Research
Financial summary
| Y/e 31 Mar (Rs m) |
FY10 |
FY11E |
FY12E |
FY13E |
| Revenues |
110,256 |
127,439 |
144,495 |
166,445 |
| yoy growth (%) |
10.7 |
15.6 |
13.4 |
15.2 |
| Operating profit |
10,124 |
12,617 |
15,316 |
18,642 |
| OPM (%) |
9.2 |
9.9 |
10.6 |
11.2 |
| Pre-exceptional PAT |
(10,795) |
(7,697) |
(7,597) |
(6,110) |
| Reported PAT |
(5,977) |
(7,697) |
(7,597) |
(6,110) |
| yoy growth (%) |
- |
28.8 |
(1.3) |
(19.6) |
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| EPS (Rs) |
(21.0) |
(27.0) |
(26.7) |
(21.4) |
| P/E (x) |
- |
- |
- |
- |
| P/BV (x) |
1.4 |
1.7 |
2.1 |
2.7 |
| EV/EBITDA (x) |
13.3 |
11.3 |
9.7 |
7.9 |
| Debt/Equity (x) |
1.6 |
2.1 |
2.8 |
3.5 | Source: Company, India Infoline Research
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