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S u b s c r i b e r b a s e r e d u c e s ; a m a j o r c o n c e r n…
Tata Teleservices Maharashtra’s (TTML) consolidated numbers for
Q3FY12 were in line with our expectations on the topline front but
disappointed on the bottom line front. The topline stood at | 630.6 crore
against our estimate of | 626.6 crore, growing 9.2% YoY and 2.3% QoQ.
EBITDA for the quarter stood at | 132.9 crore against our estimate of
| 147.2 crore, de growing 4.9% QoQ on the back of | 13.3 crore of
provisions provided for contingencies against the companies primarily
related to DoT. The EBITDA margin stood at 21.1%, falling 160 bps QoQ.
The company reported a loss of | 144.6 crore against our estimate of
| 98.4 crore primarily on account of higher than expected interest cost,
which included a forex loss of | 11.2 crore.
Highlights of the quarter
While revenues grew 2.3% QoQ, the wireless subscriber base fell
drastically from 16.8 million in Q2FY12 to 14.8 million in Q3FY12
representing a fall of 12.2%. The wireline subscriber base, however, grew
by 1.7% to 0.8 million. The EBITDA margin contracted 160 bps QoQ to
21.1%, primarily due | 13.3 crore of provisions for contingencies against
the company by DoT. However, a sliver lining for Q3FY12 was the share
of VAS at 32% based on higher usage of Tata Photon.
V a l u a t i o n
A decline in the subscriber base in this quarter is a major concern. We
expect the topline to grow at 3.9% CAGR over FY11-13E. However, the
net loss is expected to increase to | 454.2 crore by FY13 from positive
PAT of | 80.2 crore in FY11 (on account of sale of the tower company for
| 865.4 crore). Valuing the company at a 35% discount to Airtel at 1.2x
FY13E sales, we have arrived at a target price of | 15. At the CMP of | 16,
the stock is trading at 1.2x FY13E sales. Our target price of | 15 implies a
downside of 5%. We have downgraded the stock from BUY to HOLD.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
CLICK here for PDF post link
S u b s c r i b e r b a s e r e d u c e s ; a m a j o r c o n c e r n…
Tata Teleservices Maharashtra’s (TTML) consolidated numbers for
Q3FY12 were in line with our expectations on the topline front but
disappointed on the bottom line front. The topline stood at | 630.6 crore
against our estimate of | 626.6 crore, growing 9.2% YoY and 2.3% QoQ.
EBITDA for the quarter stood at | 132.9 crore against our estimate of
| 147.2 crore, de growing 4.9% QoQ on the back of | 13.3 crore of
provisions provided for contingencies against the companies primarily
related to DoT. The EBITDA margin stood at 21.1%, falling 160 bps QoQ.
The company reported a loss of | 144.6 crore against our estimate of
| 98.4 crore primarily on account of higher than expected interest cost,
which included a forex loss of | 11.2 crore.
Highlights of the quarter
While revenues grew 2.3% QoQ, the wireless subscriber base fell
drastically from 16.8 million in Q2FY12 to 14.8 million in Q3FY12
representing a fall of 12.2%. The wireline subscriber base, however, grew
by 1.7% to 0.8 million. The EBITDA margin contracted 160 bps QoQ to
21.1%, primarily due | 13.3 crore of provisions for contingencies against
the company by DoT. However, a sliver lining for Q3FY12 was the share
of VAS at 32% based on higher usage of Tata Photon.
V a l u a t i o n
A decline in the subscriber base in this quarter is a major concern. We
expect the topline to grow at 3.9% CAGR over FY11-13E. However, the
net loss is expected to increase to | 454.2 crore by FY13 from positive
PAT of | 80.2 crore in FY11 (on account of sale of the tower company for
| 865.4 crore). Valuing the company at a 35% discount to Airtel at 1.2x
FY13E sales, we have arrived at a target price of | 15. At the CMP of | 16,
the stock is trading at 1.2x FY13E sales. Our target price of | 15 implies a
downside of 5%. We have downgraded the stock from BUY to HOLD.
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