Tata Communications (Q4 FY12)

India Infoline News Service | Mumbai |

Tcom Q4 revenues grew ~10% qoq (+29% yoy) led by robust 12% and 9.8% sequential rise in data and voice business; on a like-to-like basis Neotel grew 10% yoy

CMP Rs202, Target Rs195, Downside 3.5% 
  • Tcom Q4 revenues grew ~10% qoq (+29% yoy) led by robust 12% and 9.8% sequential rise in data and voice business; on a like-to-like basis Neotel grew 10% yoy

  • Core business revenues grew 20% yoy while EBIDTA grew 15% yoy to Rs4.6bn; on a sequential basis, Q4 revenues up 11% but EBIDTA declined 5% due to one time pension and other cost hit to the tune of Rs1bn  

  • Q4 international traffic was up 13% qoq to 15bn mins but net rev/min declined 2% qoq to 0.49 cents

  • Q4 margin dipped 167bps qoq but it includes ~Rs1bn in one time pension & other costs; reported loss widens to Rs2.6bn

  • FY12 core business gross debt remained virtually unchanged at US$1.58bn vs US$1.55bn in FY11 but net debt increased to US$1.6bn vs US$1.4bn in the previous year

  • Tcom balance sheet remains highly leveraged and long pending land issue inhibits much needed equity funding, in our view. On the operating front, global data growth is likely to remain healthy as company ramps up diversified offerings across multiple geographies; however, we do not foresee any catalysts in the near term and expect debt concerns to weigh on the stock. Maintain our Market Performer rating with revised 9-mth SOTP tgt of Rs195 (earlier Rs215)

Results table (consolidated)
(Rs m) Q4 FY12 Q3 FY12 % qoq Q4 FY11 % yoy
Net sales 39,613 36,041 9.9 30,688 29.1
Network costs (21,610) (19,900) 8.6 (17,928) 20.5
Operating & other exp. (6,863) (6,014) 14.1 (5,056) 35.7
Personnel costs (6,287) (5,109) 23.1 (4,157) 51.3
Operating profit 4,853 5,019 (3.3) 3,548 36.8
OPM (%) 12.3 13.9 (167) bps 11.6 69 bps
Depreciation (4,928) (4,728) 4.2 (3,913) 25.9
Interest (1,858) (1,922) (3.3) (1,074) 73.0
Other income 540 522 3.5 774 (30.2)
PBT (1,393) (1,109) 25.6 (665) 109.3
Tax (13) (155) (91.6) (37) (64.6)
Minority Int/Associates (1,204) (266) - (192) -
Adjusted PAT (2,609) (1,531) 70.5 (894) 191.9
Extra ordinary items - - - (671) -
Reported PAT (2,609) (1,531) 70.5 (1,565) 66.7
Source: Company, India Infoline Research
 
Financial summary
Y/e 31 Mar (Rs m) FY11 FY12E FY13E FY14E
Revenues 119,320 141,961 163,125 178,515
yoy growth (%) 8.2 19.0 14.9 9.4
Operating profit 12,253 17,915 21,206 23,564
OPM (%) 10.3 12.6 13.0 13.2
Pre-exceptional PAT (7,098) (7,947) (5,910) (5,508)
Reported PAT (7,769) (7,947) (5,910) (5,508)
yoy growth (%) 30.0 2.3 (25.6) (6.8)
         
P/BV (x) 1.6 2.1 2.6 3.5
EV/EBITDA (x) 11.0 8.5 7.5 7.0
Debt/Equity (x) 2.4 3.5 4.8
BSE 715.10 35.50 (5.22%)
NSE 715.50 35.85 (5.27%)

***Note: This is a NSE Chart

 

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