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D i s m a l p e r f o r m a n c e , o u t l o o k b l e a k …
Tata Teleservices Maharashtra’s (TTML) consolidated numbers for
Q1FY12 were slightly better than our expectations. The topline stood at |
590.0 crore against our estimate of | 565.4 crore, growing 5.3% YoY and
remaining more or less flat QoQ. EBITDA for the quarter stood at | 119.4
crore against our estimate of | 107.3 crore, growing 7.3% QoQ. EBITDA
margin stood at 20.2% representing an improvement of 135 bps QoQ.
The company reported a loss of | 119.3 crore against our estimation of |
166.3 crore primarily on account of lower than expected depreciation.
ƒ Highlights of the quarter
TTML reported ARPU of | 184 (based on active subscriber base) for
Q1FY12, growing 2.8% QoQ on active subscriber base. According to
our estimates, active subscribers as a percentage of total
subscribers improved marginally from ~45% in Q4FY11 to ~46% in
Q1FY12. The company managed to improve its MoU from 407 to
416 while the ARPM remained flat at 44 paisa. With increasing usage
of Tata Photon services, non-voice revenues increased to 29.8%
from 26.7% in last quarter. The company also recorded lowest
quarterly addition in the wireless segment in the last eight quarters.
V a l u a t i o n
We estimate the topline will grow at 7.8% CAGR over FY11-13E.
However, net loss is expected to increase to | 482.0 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 1.4x FY13E sales, we have arrived at a target price of | 19. At the
CMP of | 21, the stock is trading at 1.5x FY13E sales. Our target price of |
19 implies a downside of 10%. We continue to rate the stock as SELL.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
D i s m a l p e r f o r m a n c e , o u t l o o k b l e a k …
Tata Teleservices Maharashtra’s (TTML) consolidated numbers for
Q1FY12 were slightly better than our expectations. The topline stood at |
590.0 crore against our estimate of | 565.4 crore, growing 5.3% YoY and
remaining more or less flat QoQ. EBITDA for the quarter stood at | 119.4
crore against our estimate of | 107.3 crore, growing 7.3% QoQ. EBITDA
margin stood at 20.2% representing an improvement of 135 bps QoQ.
The company reported a loss of | 119.3 crore against our estimation of |
166.3 crore primarily on account of lower than expected depreciation.
ƒ Highlights of the quarter
TTML reported ARPU of | 184 (based on active subscriber base) for
Q1FY12, growing 2.8% QoQ on active subscriber base. According to
our estimates, active subscribers as a percentage of total
subscribers improved marginally from ~45% in Q4FY11 to ~46% in
Q1FY12. The company managed to improve its MoU from 407 to
416 while the ARPM remained flat at 44 paisa. With increasing usage
of Tata Photon services, non-voice revenues increased to 29.8%
from 26.7% in last quarter. The company also recorded lowest
quarterly addition in the wireless segment in the last eight quarters.
V a l u a t i o n
We estimate the topline will grow at 7.8% CAGR over FY11-13E.
However, net loss is expected to increase to | 482.0 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 1.4x FY13E sales, we have arrived at a target price of | 19. At the
CMP of | 21, the stock is trading at 1.5x FY13E sales. Our target price of |
19 implies a downside of 10%. We continue to rate the stock as SELL.
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