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http://content.icicidirect.com/mailimages/ICICIdirect_TulipIT_Q3FY12.pdf
H u g e d e b t a c o n c e r n …
Tulip Telecom reported its Q3FY12 numbers, which were lower than our
estimates with topline at | 686.6 crore against our expectation of | 727.2
crore, registering growth of 14.0% YoY but de-growing 2.3% QoQ
attributable to the headwinds in the macroeconomic environment.
EBITDA for the quarter was at | 199.1 crore at 29.0% of revenues,
growing 16.0% YoY and de-growing 2.0% QoQ. The bottomline was
marred by higher interest cost related to rising debt levels including high
cost mezzanine funding. PAT stood at | 77.3 crore against our
expectation of | 91.6 crore. Interest costs rose sharply by 23.8% QoQ to
| 42.7 crore.
Highlights of the quarter
The company continues to see high traction on the newly laid fibre optic
cable business, with about 83% of the new orders received in Q3FY12 on
fibre optics. The company also added various new clients in this quarter,
which included NTT Communications, Sahara Para Banking, Axis Bank,
Tata Mutual Fund and CBI among others.
Data Connectivity formed ~64% of total revenues, managed services
including data centre formed ~27% whereas network integration saw a
healthy growth and contributed ~ 9% to total revenues.
V a l u a t i o n
In light of the lower revenue growth forecast by the management and
increasing finance charges, we have lowered our EPS estimates for FY12
by | 21.9 to | 19.1 and for FY13 from | 22.9 to | 20.2. At the current
market price of | 115, the stock is trading at 6.0x FY12E diluted EPS of
| 19.1 and 5.7x FY13E diluted EPS of | 20.2. We have valued the stock at
7x FY13E EPS and arrived at a target price of | 141, which implies an
upside of 23%. The high levels of debt can remain an overhang on the
stock. We maintain our BUY rating on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://content.icicidirect.com/mailimages/ICICIdirect_TulipIT_Q3FY12.pdf
H u g e d e b t a c o n c e r n …
Tulip Telecom reported its Q3FY12 numbers, which were lower than our
estimates with topline at | 686.6 crore against our expectation of | 727.2
crore, registering growth of 14.0% YoY but de-growing 2.3% QoQ
attributable to the headwinds in the macroeconomic environment.
EBITDA for the quarter was at | 199.1 crore at 29.0% of revenues,
growing 16.0% YoY and de-growing 2.0% QoQ. The bottomline was
marred by higher interest cost related to rising debt levels including high
cost mezzanine funding. PAT stood at | 77.3 crore against our
expectation of | 91.6 crore. Interest costs rose sharply by 23.8% QoQ to
| 42.7 crore.
Highlights of the quarter
The company continues to see high traction on the newly laid fibre optic
cable business, with about 83% of the new orders received in Q3FY12 on
fibre optics. The company also added various new clients in this quarter,
which included NTT Communications, Sahara Para Banking, Axis Bank,
Tata Mutual Fund and CBI among others.
Data Connectivity formed ~64% of total revenues, managed services
including data centre formed ~27% whereas network integration saw a
healthy growth and contributed ~ 9% to total revenues.
V a l u a t i o n
In light of the lower revenue growth forecast by the management and
increasing finance charges, we have lowered our EPS estimates for FY12
by | 21.9 to | 19.1 and for FY13 from | 22.9 to | 20.2. At the current
market price of | 115, the stock is trading at 6.0x FY12E diluted EPS of
| 19.1 and 5.7x FY13E diluted EPS of | 20.2. We have valued the stock at
7x FY13E EPS and arrived at a target price of | 141, which implies an
upside of 23%. The high levels of debt can remain an overhang on the
stock. We maintain our BUY rating on the stock.
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