Tulip Telecom - Growth momentum on track, Maintain BUY:Emkay

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Tulip Telecom

Growth momentum on track, Maintain BUY

BUY

CMP: Rs157                                        Target Price: Rs218

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n     Revenue at Rs6.5bn (better than our est. of Rs6.4bn) grew 24.5% yoy, led higher revenue realization in from the fibre business which aided the strong margins as well

n     Q1FY12 EBIDTA grew 30.4% to Rs1.8bn and APAT grew 20.4% yoy to Rs772mn (our est. of Rs743mn). Strong revenue and EBITDA led to PAT growth of 20.4% yoy

n     Net-debt rises to Rs16.5bn at the end of Q1FY12 v/s Rs14.3bn in Q4FY11, due to higher working capital requirements. Debt/EBITDA stands at 2.6x and D/E at 1.5x 

n     Valuations attractive at FY13E EV/EBIDTA of 3.3x & P/E 5.9x. Maintain BUY with TP of Rs218