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| India Infoline Research Team / 11:16 , Aug 06, 2010 |
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CMP Rs181, Target price Rs214, Upside 18.2%
Tulip wins Rs1.6bn R-APDRP projects to provide data connectivity
- Tulip Telecom has won R-APDRP projects worth Rs1.6bn for UP and Gujarat
- It would provide MPLS VPN, internet and other data connectivity services to all the project towns under the R-APDRP scheme floated by the respective power corporations of the two states
- Tulip would have deliver the projects over 12-18 months and maintain them for a period of 5 years
- Projects are part of the larger Restructured APDRP, a reform initiative driven by Power Ministry to set up secure and automated systems to collect accurate data in metering, billing, energy accounting etc; the aim is to significantly reduce T&D losses
- Order wins comes on the back of successful implementation of State Wide Area Network (SWAN) projects in Haryana and WB and is yet another fruitful effort to get a toe-hold in large govt schemes like APDRP, NREGA that require provision of data connectivity services in rural areas
- Company represents a pure-play on the nascent MPLS VPN and indeed the entire data connectivity ecosystem; retain BUY with a 9-month TP of Rs214
Financial Summary
| Y/e 31 Mar (Rs m) |
FY09 |
FY10E |
FY11E |
FY12E |
| Revenues |
16,144 |
19,664 |
23,837 |
26,712 |
| yoy growth (%) |
32.4 |
21.8 |
21.2 |
12.1 |
| Operating profit |
3,367 |
5,255 |
6,150 |
6,972 |
| OPM (%) |
20.9 |
26.7 |
25.8 |
26.1 |
| Pre-exceptional PAT |
2,385 |
2,537 |
3,049 |
3,574 |
| Reported PAT |
2,505 |
2,755 |
3,049 |
3,574 |
| yoy growth (%) |
33.8 |
10.0 |
10.7 |
17.2 |
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| EPS (Rs) |
17.3 |
19.0 |
21.0 |
24.6 |
| P/E (x) |
10.6 |
9.7 |
8.8 |
7.5 |
| P/BV (x) |
3.9 |
2.9 |
2.2 |
1.7 |
| EV/EBITDA (x) |
10.2 |
6.7 |
5.6 |
4.6 |
| Debt/Equity (x) |
1.6 |
1.3 |
0.8 |
0.5 |
| ROE (%) |
42.3 |
31.5 |
28.2 |
25.3 |
| ROCE (%) |
20.2 |
21.2 |
21.9 |
23.3 | Source: Company, India Infoline Research
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