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Tulip Telecom has reported a strong set of Q1FY12 results with an
acceleration in Y/Y growth rate to 25%, ahead of the 19-20% seen during
FY11. We believe this points to increasing contribution from the fibre
business. The other key development is the order win for its Data Centre (DC)
business for 30K sq ft. EBITDA margin in the quarter was under slight
pressure as a result of seasonality but the net profit beat both JPMe and
consensus. We continue to like Tulip and see these results as confirmation of
improving trends. DC business progress will be well received in our view.
Q1 revenue of INR 6,539mn, +2.5% Q/Q, +24.5% Y/Y: Q1 revenue beat
JPMe/consensus of INR 6,458m/INR 6,316m by 1%/4%. We note that Q3
and Q4 tend to be the stronger quarters for Tulip so are encouraged with the
Q/Q growth in Q1FY12 (-1% in Q1FY11, -4% in Q1FY10). We also note
that the Y/Y growth rate has accelerated nicely from 19-20% range in FY11
to ~25% in Q1FY12. We believe this is a result of high-bandwidth fibre
business starting to have a positive impact. We expect consensus to increase
their FY12 revenue estimates slightly as a result of the Q1 beat.
Data centre progressing well: Tulip's data centre is expected to become
commercially active from Q2FY12. The company announced an order win
from a global organization for 30K sq ft over 5 years with potential revenue
of INR 5bn. Their order visibility is 150K sq ft.
Revenue break-down: Connectivity contributed 60% of revenue (68% in
Q4), managed services is 33% up from 21% while network integration is
7%. Vs. 11%. Fibre contribution was strong again with 80% of new orders
on fibre in the quarter stable vs. Q4 and up from 70% in Q3. Tulip’s last
mile fibre network now spans over 7200 km vs. ~6000 km earlier. UP and
Gujarat R-APDRP are expected to start contributing revenue from Q2.
Margin under slight pressure: Consolidated EBITDA margin was 28.3%,
in-line with JPMe’s 28.4% but ahead of cons 27.9%. Margin declined 1pp
Q/Q after the 80bp increase in Q4, 55bp in Q3 and 90bp in Q2. We believe
this is normal seasonality. On a Y/Y basis margins improved 1.2pp.
Absolute EBITDA of INR 1.85bn is 1%5% ahead of JPMe/cons.
Net profit was INR 772mn ahead of JPMe/cons of INR 670mn/INR
731mn. Q1 EPS was INR 4.75 (-7% Q/Q, +20% Y/Y) vs. JPMe/cons of INR
4.1/4.5. We note that interest expense is INR 319m vs. INR 267m in Q4.
The company has said that the overall cost of funds has increased to 10.2%
from 8.6% a year ago.
Q1 capex at INR 1.39bn, 21% of calex: This is below JPMe of INR 1.9bn
and also down from the INR 1.5bn spent on the core business in Q4.
TTSL reported total debt of INR 19.2bn vs. INR 17.8bn in Q4 Debt/equity
has increased to 1.50x from 1.47x while debt/EBITDA has declined slightly
to 2.60x from 2.68x
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Tulip Telecom has reported a strong set of Q1FY12 results with an
acceleration in Y/Y growth rate to 25%, ahead of the 19-20% seen during
FY11. We believe this points to increasing contribution from the fibre
business. The other key development is the order win for its Data Centre (DC)
business for 30K sq ft. EBITDA margin in the quarter was under slight
pressure as a result of seasonality but the net profit beat both JPMe and
consensus. We continue to like Tulip and see these results as confirmation of
improving trends. DC business progress will be well received in our view.
Q1 revenue of INR 6,539mn, +2.5% Q/Q, +24.5% Y/Y: Q1 revenue beat
JPMe/consensus of INR 6,458m/INR 6,316m by 1%/4%. We note that Q3
and Q4 tend to be the stronger quarters for Tulip so are encouraged with the
Q/Q growth in Q1FY12 (-1% in Q1FY11, -4% in Q1FY10). We also note
that the Y/Y growth rate has accelerated nicely from 19-20% range in FY11
to ~25% in Q1FY12. We believe this is a result of high-bandwidth fibre
business starting to have a positive impact. We expect consensus to increase
their FY12 revenue estimates slightly as a result of the Q1 beat.
Data centre progressing well: Tulip's data centre is expected to become
commercially active from Q2FY12. The company announced an order win
from a global organization for 30K sq ft over 5 years with potential revenue
of INR 5bn. Their order visibility is 150K sq ft.
Revenue break-down: Connectivity contributed 60% of revenue (68% in
Q4), managed services is 33% up from 21% while network integration is
7%. Vs. 11%. Fibre contribution was strong again with 80% of new orders
on fibre in the quarter stable vs. Q4 and up from 70% in Q3. Tulip’s last
mile fibre network now spans over 7200 km vs. ~6000 km earlier. UP and
Gujarat R-APDRP are expected to start contributing revenue from Q2.
Margin under slight pressure: Consolidated EBITDA margin was 28.3%,
in-line with JPMe’s 28.4% but ahead of cons 27.9%. Margin declined 1pp
Q/Q after the 80bp increase in Q4, 55bp in Q3 and 90bp in Q2. We believe
this is normal seasonality. On a Y/Y basis margins improved 1.2pp.
Absolute EBITDA of INR 1.85bn is 1%5% ahead of JPMe/cons.
Net profit was INR 772mn ahead of JPMe/cons of INR 670mn/INR
731mn. Q1 EPS was INR 4.75 (-7% Q/Q, +20% Y/Y) vs. JPMe/cons of INR
4.1/4.5. We note that interest expense is INR 319m vs. INR 267m in Q4.
The company has said that the overall cost of funds has increased to 10.2%
from 8.6% a year ago.
Q1 capex at INR 1.39bn, 21% of calex: This is below JPMe of INR 1.9bn
and also down from the INR 1.5bn spent on the core business in Q4.
TTSL reported total debt of INR 19.2bn vs. INR 17.8bn in Q4 Debt/equity
has increased to 1.50x from 1.47x while debt/EBITDA has declined slightly
to 2.60x from 2.68x
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