Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
Tulip Telecom
G ood start to the year
�� Event: 1QFY12 results – Revenue, EBITDA ahead of expectations
Tulip Telecom announced consolidated 1QFY12 results: Revenues were Rs6,539m
(UBS-e Rs6,348m), EBITDA came in at Rs1,848m (UBS-e Rs1,765m) and net
profit was Rs772m (UBS-e Rs739m). EBITDA margins at 28.3% (vs. UBS-e
27.8%) continue to improve as contribution of fibre business increases.
Operationally also Tulip did well in 1QFY12 with 80% of new orders coming on
fibre. On Data Centre, Tulip got a 5 year order for 30,000 sq ft worth Rs5,000m.
The company mentioned that it is currently pursuing orders for 150,000 sq ft.
�� Impact: Maintain our FY12E/FY13E estimates
We maintain our FY12E/FY13E earnings estimates. We expect net income to grow
by 18.4% and 20.4% in FY12E and FY13E to Rs3,636m and Rs4,379m resp. The
company is hosting a conference call tomorrow at 14:00 India time (Table 4).
�� Action: Reiterate Buy with SOTP based PT of Rs260
Tulip offers pure exposure to the India enterprise data market. We believe Tulip is
well positioned to benefit from enterprise data growth, given its reach (2,200
cities); relationships (corporate and government), enterprise focus; and largest lastmile
fibre coverage. We think Tulip could be a potential acquisition candidate.
�� Valuation: Tulip is currently trading at FY12E EV/EBITDA of 4.2x
We value the core business at Rs251/share, using a DCF-based methodology and
explicitly forecast long-term valuation drivers with UBS’s VCAM tool. We ascribe
Rs9/share (at cost) to Tulip’s 13% stake in Qualcomm’s BWA joint venture. We
find Tulip’s valuation attractive at 6.1x FY12E PE.
Tulip Telecom
Tulip Telecom (Tulip) is the largest multi-protocol label switching virtual
private network (MPLS VPN) service provider in India. Initially, it used
wireless spectrum for 'last-mile' connectivity, but in recent years it has focused
on laying last-mile fibre network so as to offer high bandwidth products. Tulip
leases inter-city fibre from large telecom or state utility firms. The company is
focused on being a complete enterprise data company. Tulip has approximately
6,600km of last-mile fibre in more than 300 cities. It has over 2,200 clients and
covers 2,000 cities. The company also has five Tier3+ data centres.
Statement of Risk
In addition to the risks affecting the Indian Telecom sector, we believe that the
following are the company-specific risks to our buy thesis: 1) Execution delays
in the data centre entity could impact Tulip's consolidated performance; 2) Tulip
continues to remain free cash flow negative; 3) Irrational competition in the
enterprise data segment could impact Tulip's revenue and profitability; 4)
Inability to pay FCCBs due on Aug 2012 could be a negative overhang on the
company
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
Tulip Telecom
G ood start to the year
�� Event: 1QFY12 results – Revenue, EBITDA ahead of expectations
Tulip Telecom announced consolidated 1QFY12 results: Revenues were Rs6,539m
(UBS-e Rs6,348m), EBITDA came in at Rs1,848m (UBS-e Rs1,765m) and net
profit was Rs772m (UBS-e Rs739m). EBITDA margins at 28.3% (vs. UBS-e
27.8%) continue to improve as contribution of fibre business increases.
Operationally also Tulip did well in 1QFY12 with 80% of new orders coming on
fibre. On Data Centre, Tulip got a 5 year order for 30,000 sq ft worth Rs5,000m.
The company mentioned that it is currently pursuing orders for 150,000 sq ft.
�� Impact: Maintain our FY12E/FY13E estimates
We maintain our FY12E/FY13E earnings estimates. We expect net income to grow
by 18.4% and 20.4% in FY12E and FY13E to Rs3,636m and Rs4,379m resp. The
company is hosting a conference call tomorrow at 14:00 India time (Table 4).
�� Action: Reiterate Buy with SOTP based PT of Rs260
Tulip offers pure exposure to the India enterprise data market. We believe Tulip is
well positioned to benefit from enterprise data growth, given its reach (2,200
cities); relationships (corporate and government), enterprise focus; and largest lastmile
fibre coverage. We think Tulip could be a potential acquisition candidate.
�� Valuation: Tulip is currently trading at FY12E EV/EBITDA of 4.2x
We value the core business at Rs251/share, using a DCF-based methodology and
explicitly forecast long-term valuation drivers with UBS’s VCAM tool. We ascribe
Rs9/share (at cost) to Tulip’s 13% stake in Qualcomm’s BWA joint venture. We
find Tulip’s valuation attractive at 6.1x FY12E PE.
Tulip Telecom
Tulip Telecom (Tulip) is the largest multi-protocol label switching virtual
private network (MPLS VPN) service provider in India. Initially, it used
wireless spectrum for 'last-mile' connectivity, but in recent years it has focused
on laying last-mile fibre network so as to offer high bandwidth products. Tulip
leases inter-city fibre from large telecom or state utility firms. The company is
focused on being a complete enterprise data company. Tulip has approximately
6,600km of last-mile fibre in more than 300 cities. It has over 2,200 clients and
covers 2,000 cities. The company also has five Tier3+ data centres.
Statement of Risk
In addition to the risks affecting the Indian Telecom sector, we believe that the
following are the company-specific risks to our buy thesis: 1) Execution delays
in the data centre entity could impact Tulip's consolidated performance; 2) Tulip
continues to remain free cash flow negative; 3) Irrational competition in the
enterprise data segment could impact Tulip's revenue and profitability; 4)
Inability to pay FCCBs due on Aug 2012 could be a negative overhang on the
company
No comments:
Post a Comment