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B e t t e r t h a n e x p e c t e d o p e r a t i o n a l l y…
Tata Teleservices Maharashtra’s (TTML) consolidated numbers for
Q2FY12 were slightly better than our expectations on the topline front.
The topline stood at | 616.4 crore vs. our estimate of | 596.0 crore,
growing 7.0% YoY and 4.5% QoQ. The EBITDA for the quarter stood at |
139.8 crore vs. our estimate of | 124.1, growing 17.1% QoQ. The EBITDA
margin stood at 22.7%, an improvement of 244 bps QoQ. The company
reported a loss of | 130.2 crore vs. our estimation of | 122.4 crore
primarily on account of higher-than-expected interest cost.
Highlights of the quarter
While revenues grew 4.5% QoQ, the wireless subscriber base stayed
more or less flat at 16.8 million. The wireline subscriber base grew by a
marginal 1.0% to 0.8 million. The EBITDA margin for the company
improved by 244 bps QoQ to 22.7% primarily due to lower marketing and
promotion expenses, which reduced from | 66.6 crore, at 11.3% of
revenues in Q1FY12 to | 61.2 crore, at 9.9% of revenues in Q2FY12. The
PAT margin, however, declined from a negative 20.2% to a negative
21.1% in Q2FY12 primarily due to higher interest cost.
V a l u a t i o n
We estimate the topline will grow at 4.8% CAGR over FY11-13E.
However, the net loss is expected to increase to | 414.3 crore by FY13
from positive PAT of | 80.2 crore in FY11 (on account of the 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
| 16. At the CMP of | 15, the stock is trading at 1.1x FY13E sales. Our
target price of | 16 implies an upside of 9%. We rate the stock as HOLD
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
B e t t e r t h a n e x p e c t e d o p e r a t i o n a l l y…
Tata Teleservices Maharashtra’s (TTML) consolidated numbers for
Q2FY12 were slightly better than our expectations on the topline front.
The topline stood at | 616.4 crore vs. our estimate of | 596.0 crore,
growing 7.0% YoY and 4.5% QoQ. The EBITDA for the quarter stood at |
139.8 crore vs. our estimate of | 124.1, growing 17.1% QoQ. The EBITDA
margin stood at 22.7%, an improvement of 244 bps QoQ. The company
reported a loss of | 130.2 crore vs. our estimation of | 122.4 crore
primarily on account of higher-than-expected interest cost.
Highlights of the quarter
While revenues grew 4.5% QoQ, the wireless subscriber base stayed
more or less flat at 16.8 million. The wireline subscriber base grew by a
marginal 1.0% to 0.8 million. The EBITDA margin for the company
improved by 244 bps QoQ to 22.7% primarily due to lower marketing and
promotion expenses, which reduced from | 66.6 crore, at 11.3% of
revenues in Q1FY12 to | 61.2 crore, at 9.9% of revenues in Q2FY12. The
PAT margin, however, declined from a negative 20.2% to a negative
21.1% in Q2FY12 primarily due to higher interest cost.
V a l u a t i o n
We estimate the topline will grow at 4.8% CAGR over FY11-13E.
However, the net loss is expected to increase to | 414.3 crore by FY13
from positive PAT of | 80.2 crore in FY11 (on account of the 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
| 16. At the CMP of | 15, the stock is trading at 1.1x FY13E sales. Our
target price of | 16 implies an upside of 9%. We rate the stock as HOLD
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