Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Tulip Telecom Ltd (TULP.BO)
3Q Ahead on Strong Business Momentum
Earnings/TP adjusted primarily on data centre acquisition — We adjust
FY12E EBITDA/EPS down 3/16% to account for EBITDA losses and higher
interest outgo on the data-centre acquisition. Operationally, business continues to
sustain momentum reflected in FY11-13E EBITDA growing at a CAGR of 18%. We
roll-forward our 10x PE target multiple to Mar-12E (Sep-11E earlier) to arrive at a
new TP of Rs210 (Rs224 earlier).
Data-centre acquisition: ramp will take time with near term EBITDA dilution
— Tulip recently acquired a data-centre facility spread across 900k sq ft for
Rs2.3bn. The company has guided to EBITDA losses of ~Rs500m in the first year
with EBITDA BE at 30% utilisation. We estimate ramp-up in utilisation to be backended,
with the company touching the 60% level over a period of three years
(guidance at 90%).
Sustained improvement in business profile – 3Q EBITDA at Rs1.7bn (3%qoq;
27% yoy) beat expectations as EBITDA margins held on, continuing to reap
benefits of scale economies. Tulip has witnessed a margin improvement of 700bps
since its fiber launch ~7 quarters back. PAT at Rs816m (+5%qoq; 19% yoy) also
came in ahead.
Maintain Buy – The company has started to benefit from fiber in terms of scale
economies and higher profitability. Revenues from the data centre, though, may
take 18-24 months to ramp up, but will help improve the company’s revenue
visibility. The stock is trading at 8.1x FY12E PER, relatively cheap given mediumterm
growth potential. Disruptive pricing from new competition in data connectivity
and a slower ramp-up in data centre revenues are the key downside risks.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Tulip Telecom Ltd (TULP.BO)
3Q Ahead on Strong Business Momentum
Earnings/TP adjusted primarily on data centre acquisition — We adjust
FY12E EBITDA/EPS down 3/16% to account for EBITDA losses and higher
interest outgo on the data-centre acquisition. Operationally, business continues to
sustain momentum reflected in FY11-13E EBITDA growing at a CAGR of 18%. We
roll-forward our 10x PE target multiple to Mar-12E (Sep-11E earlier) to arrive at a
new TP of Rs210 (Rs224 earlier).
Data-centre acquisition: ramp will take time with near term EBITDA dilution
— Tulip recently acquired a data-centre facility spread across 900k sq ft for
Rs2.3bn. The company has guided to EBITDA losses of ~Rs500m in the first year
with EBITDA BE at 30% utilisation. We estimate ramp-up in utilisation to be backended,
with the company touching the 60% level over a period of three years
(guidance at 90%).
Sustained improvement in business profile – 3Q EBITDA at Rs1.7bn (3%qoq;
27% yoy) beat expectations as EBITDA margins held on, continuing to reap
benefits of scale economies. Tulip has witnessed a margin improvement of 700bps
since its fiber launch ~7 quarters back. PAT at Rs816m (+5%qoq; 19% yoy) also
came in ahead.
Maintain Buy – The company has started to benefit from fiber in terms of scale
economies and higher profitability. Revenues from the data centre, though, may
take 18-24 months to ramp up, but will help improve the company’s revenue
visibility. The stock is trading at 8.1x FY12E PER, relatively cheap given mediumterm
growth potential. Disruptive pricing from new competition in data connectivity
and a slower ramp-up in data centre revenues are the key downside risks.
No comments:
Post a Comment