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Tata Communications Ltd Underweight
TATA.BO, TCOM IN
1Q FY12: Neotel consolidation skews comparables
but voice and Neotel remain concerns
drag from Neotel (which is now 100% consolidated). We note that voice
revenue declined 5% Q/Q driven by continued pressure on pricing. Due to
reclassification of revenue between Data and Other segments and the
change from 43.2% Neotel consolidation to 100%, full comparables are
not possible at this time. The bottom line disappointed, with a net loss of
Rs2.2B, or EPS of -Rs7.7. On a standalone basis, the company reported
4% Q/Q revenue growth and a 90bp margin expansion although EPS
declined 5% Q/Q.
TCOM reported consolidated Q1 revenue of Rs32.6B, beating JPMe
by 5%: This was driven by the Other segment (retail broadband and
Neotel) where Neotel is now 100% consolidated vs. 43.2% earlier.
Revenue breakdown: Voice declines Q/Q: Within the revenue mix,
Data revenue was Rs12.6B and Other revenue was Rs3.8B. Voice
revenue at Rs16.1B declined 5% Q/Q after the seasonally strong 4Q and
grew only 1% Y/Ym missing JPMe by 4.1%. We believe voice minutes
were flattish Q/Q; however continued pricing pressure resulted in the
voice revenue decline.
Consolidated EBITDA margin was 10.0% (-1.6pp Q/Q), missing
JPMe of 11.3% by 1.3pp. Absolute EBITDA of Rs3.26B was 7% below
JPMe of Rs3.5B.
Neotel continues to drag: We estimate that Neotel’s revenue was
Rs3.6B, a sequential slowdown, while the EBITDA margin improved
marginally from -15% to -14%. We look for further details here.
Standalone results: Revenue, at Rs8,989B, increased 4% Q/Q, 7% Y/Y,
while the EBITDA margin improved 0.9pp to 25.6%. Net Income was
Rs478MM, -5% Q/Q, which implies a 5.3% margin, -0.5pp Q/Q. 1Q
standalone EPS was Rs1.7, -5% Q/Q driven by a higher tax (rate of 34%
vs. 30% in 4Q).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Tata Communications Ltd Underweight
TATA.BO, TCOM IN
1Q FY12: Neotel consolidation skews comparables
but voice and Neotel remain concerns
drag from Neotel (which is now 100% consolidated). We note that voice
revenue declined 5% Q/Q driven by continued pressure on pricing. Due to
reclassification of revenue between Data and Other segments and the
change from 43.2% Neotel consolidation to 100%, full comparables are
not possible at this time. The bottom line disappointed, with a net loss of
Rs2.2B, or EPS of -Rs7.7. On a standalone basis, the company reported
4% Q/Q revenue growth and a 90bp margin expansion although EPS
declined 5% Q/Q.
TCOM reported consolidated Q1 revenue of Rs32.6B, beating JPMe
by 5%: This was driven by the Other segment (retail broadband and
Neotel) where Neotel is now 100% consolidated vs. 43.2% earlier.
Revenue breakdown: Voice declines Q/Q: Within the revenue mix,
Data revenue was Rs12.6B and Other revenue was Rs3.8B. Voice
revenue at Rs16.1B declined 5% Q/Q after the seasonally strong 4Q and
grew only 1% Y/Ym missing JPMe by 4.1%. We believe voice minutes
were flattish Q/Q; however continued pricing pressure resulted in the
voice revenue decline.
Consolidated EBITDA margin was 10.0% (-1.6pp Q/Q), missing
JPMe of 11.3% by 1.3pp. Absolute EBITDA of Rs3.26B was 7% below
JPMe of Rs3.5B.
Neotel continues to drag: We estimate that Neotel’s revenue was
Rs3.6B, a sequential slowdown, while the EBITDA margin improved
marginally from -15% to -14%. We look for further details here.
Standalone results: Revenue, at Rs8,989B, increased 4% Q/Q, 7% Y/Y,
while the EBITDA margin improved 0.9pp to 25.6%. Net Income was
Rs478MM, -5% Q/Q, which implies a 5.3% margin, -0.5pp Q/Q. 1Q
standalone EPS was Rs1.7, -5% Q/Q driven by a higher tax (rate of 34%
vs. 30% in 4Q).
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