Tata Communications (Q4 FY13)

India Infoline News Service | Mumbai |

Tata Comm Q4 revenues up ~11% yoy though flat sequentially, driven by voice (gross revs +15% yoy), data (gross revs +8.3% yoy); Neotel sales up 3% yoy

CMP Rs218, Target Rs210, Downside 3.7%

  • Tata Comm Q4 revenues up ~11% yoy though flat sequentially, driven by voice (gross revs +15% yoy), data (gross revs +8.3% yoy); Neotel sales up 3% yoy

  • EBIDTA margin contracted 119bps yoy due to all round increase in costs; data margins fell 430bps to 13.7% dragging core business (ex-Neotel) margin by 160bps yoy (-120bps yoy on normalized basis); Neotel normalized margin increased 240bps yoy to 7.4%

  • Reported loss includes Rs1.8bn booked as gain on sale of fixed asset and Rs63mn in employee cost optimization expenses; FY13 core business capex stood at ~US$292mn while that for Neotel was ZAR460mn. Core business net debt at US$1.5bn while that for Neotel at ZAR5.6bn  

  • We revisit our FY14/15 estimates post FY13 results but operationally foresee no near term triggers for the stock; retain Market Performer with 9 mth target of Rs210

Results table (consolidated)
(Rs m) Q4 FY13 Q3 FY13 % qoq % yoy FY13 % yoy
Net sales 44,005 44,341 (0.8) 11.1 172,130 21.3
Network costs (24,893) (24,946) (0.2) 15.2 (96,563) 22.3
Operating & other exp. (8,198) (7,702) 6.4 19.5 (30,855) 29.0
Personnel costs (6,049) (5,682) 6.4 (3.8) (24,115) 13.8
Operating profit 4,865 6,011 (19.1) 0.3 20,597 15.0
OPM (%) 11.1 13.6 (250) bps (119) bps 12.0 (65) bps
Depreciation (4,273) (5,400) (20.9) (13.3) (20,271) 11.4
Interest (1,878) (1,888) (0.5) 1.1 (7,941) (4.8)
Other income 414 402 2.9 (23.4) 2,266 56.5
PBT (872) (876) (0.5) (37.4) (5,349) (25.5)
Tax (1,081) (405) - - (2,202) 233.9
Minority Int/ Associates 67 62 - - 276 -
Adjusted PAT (1,885) (1,219) 54.7 (27.8) (7,275) (8.5)
Extra ordinary items 1,833 (791) - - 1,042 -
Reported PAT (52) (2,010) (97.4) (98.0) (6,233) (21.6)
Source: Company, India Infoline Research

Financial summary
Y/e 31 Mar (Rs m) FY12 FY13E FY14E FY15E
Revenues 141,961 172,130 202,446 231,574
yoy growth (%) 19.0 21.3 17.6 14.4
Operating profit 17,915 20,597 24,698 28,484
OPM (%) 12.6 12.0 12.2 12.3
Reported PAT (7,947) (6,234) (5,228) (2,049)
yoy growth (%) 2.3 (21.6) (16.1) (60.8)
         
EPS (Rs) (27.9) (21.9) (18.3) (7.2)
P/BV (x) 2.7 3.8 5.5 6.7
EV/EBITDA (x) 11.4 10.5 9.1 7.8
ROCE (%) 0.7 1.5 3.0 4.4
Source: Company, India Infoline Research
BSE 687.50 [14.70] ([2.09]%)
NSE 686.90 [14.15] ([2.02]%)

***Note: This is a NSE Chart

 

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