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I n l i n e w i t h e s t i m a t e s …
Tulip Telecom reported its Q1FY12 numbers, which were in line with our
estimates with the topline at | 653.9 crore against our expectation of |
646.3 crore, registering growth of 24.5% YoY and 2.5% QoQ, primarily on
account of a rise in order input from high bandwidth fibre services.
EBITDA for the quarter stood at | 184.8 crore at 28.3% of revenue,
growing 30.4% YoY. PAT stood at | 77.2 crore against our expectation of
| 76.5 crore. Interest cost rose sharply by 19.6% QoQ to | 31.9 crore on
account of an increase in total debt from | 1776.9 crore in Q4FY11 to |
1922.0 crore in Q1FY12 and also a rise in interest rates.
ƒ Highlights of the quarter
The company continues to see high traction on the newly laid fibre
optic cable business, with about 80% of new orders received in
Q1FY12 on fibre optic. The company also added various new clients
in this quarter, which include Matrix Cellular, OICL, Karur Vysya
Bank, Reliance Life Insurance, Gamesa and Deccan Charter.
Tulip Telecom laid a 1200 km NLD fibre at a total capex of | 60 crore
between Mumbai and Chennai. The company expects payback of
around two years. Its last mile fibre network spans over 7200 km.
V a l u a t i o n
The company’s recent venture into the fibre optic business has shown
good traction with 80% of new orders coming on the fibre network. The
newly acquired data centre is progressing as planned and is scheduled to
go commercially live in Q2FY12. We have estimated utilisation level of
~30% in the data centre business in FY13. We estimate 19.3% CAGR
(FY11-13E) in revenue to | 3344.2 crore in FY13 while the PAT is expected
to grow at 20.3% CAGR over the same period to | 443.6 crore. However,
rising debt level at 1.5x debt to equity remains a cause for concern. At the
CMP of | 157, the stock is trading at 5.8x FY13E diluted EPS of | 27.0. We
have valued the stock at 7x FY13E EPS and arrived at a target price of |
189. This implies an upside of 20%. We maintain our BUY rating on the
stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
I n l i n e w i t h e s t i m a t e s …
Tulip Telecom reported its Q1FY12 numbers, which were in line with our
estimates with the topline at | 653.9 crore against our expectation of |
646.3 crore, registering growth of 24.5% YoY and 2.5% QoQ, primarily on
account of a rise in order input from high bandwidth fibre services.
EBITDA for the quarter stood at | 184.8 crore at 28.3% of revenue,
growing 30.4% YoY. PAT stood at | 77.2 crore against our expectation of
| 76.5 crore. Interest cost rose sharply by 19.6% QoQ to | 31.9 crore on
account of an increase in total debt from | 1776.9 crore in Q4FY11 to |
1922.0 crore in Q1FY12 and also a rise in interest rates.
ƒ Highlights of the quarter
The company continues to see high traction on the newly laid fibre
optic cable business, with about 80% of new orders received in
Q1FY12 on fibre optic. The company also added various new clients
in this quarter, which include Matrix Cellular, OICL, Karur Vysya
Bank, Reliance Life Insurance, Gamesa and Deccan Charter.
Tulip Telecom laid a 1200 km NLD fibre at a total capex of | 60 crore
between Mumbai and Chennai. The company expects payback of
around two years. Its last mile fibre network spans over 7200 km.
V a l u a t i o n
The company’s recent venture into the fibre optic business has shown
good traction with 80% of new orders coming on the fibre network. The
newly acquired data centre is progressing as planned and is scheduled to
go commercially live in Q2FY12. We have estimated utilisation level of
~30% in the data centre business in FY13. We estimate 19.3% CAGR
(FY11-13E) in revenue to | 3344.2 crore in FY13 while the PAT is expected
to grow at 20.3% CAGR over the same period to | 443.6 crore. However,
rising debt level at 1.5x debt to equity remains a cause for concern. At the
CMP of | 157, the stock is trading at 5.8x FY13E diluted EPS of | 27.0. We
have valued the stock at 7x FY13E EPS and arrived at a target price of |
189. This implies an upside of 20%. We maintain our BUY rating on the
stock.
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