Tata Communications Ltd. share price target

Traditional impresses but other segments subdued: Performance was steady in the first quarter of the year, with consol. EBITDA growth of 10% QoQ to INR7.6b (20% beat) on a pre-Ind-AS 116 basis (at INR8.3b on postInd-AS 116 basis). Traditional segment (part of Data) impressed, with sequential EBITDA growth of 15% and margin improvement of 490bp (36.2% v/s management guidance of ~30%). As a result, Data EBITDA grew 19% QoQ to INR6.7b. However, the quarter was also characterized by the dismal performances of the small but promising segments of Growth (EBITDA down 50% QoQ), Innovation (loss of INR1.4b) and Transformation (-24% QoQ)....

Re-spells guidance; Destination 21 seems uphill task The company spelt out its guidance on the data business indicating that it expects the traditional business to witness 2% YoY growth in FY20E, as the impact of operator consolidation seemed to have normalised. On the transformation and growth services, expected growth is ~18-20% for FY20E. On the margins front, the company expects traditional and growth business to clock 29-30% and 5-7%, respectively. Transformation services is expected to witness profitability uptick as execution picks up, with...

for 3Q/4Q one-offs of INR2.1b/INR0.2b, data EBITDA inched up marginally by 1% QoQ. This was due to benefits of Growth Services that turned EBITDA positive, being largely offset by (a) higher investments in the innovation segment, and (b) ~70% QoQ decline in Transformation/Payment business EBITDA. Headline consol. revenue/EBITDA stood flat/-19% QoQ at INR42.4b/INR6.9b, while adj. consol. revenue/EBITDA grew 1%/4% QoQ (2%/3% miss). Adj. for (INR1.7b) impairment losses from associates, net loss stood at INR271m (v/s INR231m profit in 3QFY19; est. of INR737m). For...

Revenues came in at | 4269.5 crore vs. our estimate of | 4117 crore. Reported revenues included one-time revenue of | 91 crore, owing to new regulation on the access facilitation charges for cable landing stations. Data revenues (including one-time revenues) reported growth of 14.1% YoY to | 3325.9 crore (vs. our expectation of 10% YoY growth), with adjusted revenue growth a tad higher at ~11%. Continued weakness in voice revenues resulted in a decline of 23.3% YoY (in line with our estimate of 23.1%)...

Headline consolidated revenue/EBITDA grew 5%/34% QoQ to INR42.7b/INR8.4b, led by strong growth in the data business, partly offset by voice. Adjusting for one-offs, key growth levers data revenue/EBITDA grew 5%/4%. Yet, weak voice 31 January 2019 business offset consolidated revenue/EBITDA growth of 3%/flat QoQ to INR41.8b/INR6.3b. (1) Traditional services FY20 EBITDA margin to be in the range of 29-30%, (2) Growth services deal pipeline grew 85% to USD619m, indicating robust growth going forward and turning EBITDA positive in 4QFY19, (3) TTSLs Enterprise business deal could fructify in 2-4 quarters, post conclusion of the Bharti-TTSL transaction. EBITDA/data EBITDA CAGR over FY19- 21 on healthy order pipeline in Growth & Innovation (G&I;) services, which is partly offset by higher investments in the G&I; services segment and margin pressure in the traditional segment. We rollover estimates to FY21E, deriving a target price (SOTP-basis) of INR630 (prior INR670) ascribing 6x/3x on FY21E Data/Voice EBITDA and INR176 to the land bank (likely to be hived off in the ensuing quarters).

ICICI Securities Ltd | Retail Equity Research Revenues for the quarter came in at | 4068.2 crore vs. our estimate of | 4010.1 crore. We note that from now onwards, the company has re-aligned rental revenues (previously shown in other income) as part of data segment revenues. Therefore, our estimates are not comparable. Data revenues reported growth of 9.1% YoY to | 3069.1 crore. Data revenue growth more or less compensates for continued weak voice revenues, which declined 30.4% YoY...

3 November 2018 After being restricted by two quarters of subdued performance in Data segment, consol. for rental income) growth came in at a healthy 8% QoQ (at INR6.0b 5% beat), supported by both Data and Voice businesses; EBITDA margin, too, expanded 65bp QoQ to 14.8%. revenue grew 3% QoQ (-4% YoY) to INR40.7b (2% beat), primarily led by strong growth in Data revenue. PAT came in at INR16m items, PAT was at INR1m. Revenue fell 6% YoY, while EBITDA grew 6% YoY. EBITDA margin expanded 170bp YoY to 15.2%. For 2HFY19, we expect revenue/EBITDA growth of 3%/11% YoY. Adjusted for rental income, Data revenue/EBITDA grew by 5% QoQ to INR30.4b/INR5.

Revenues for the quarter came in at | 3912.3 crore vs. our estimate of | 4047.1 crore. The miss was mainly due to lower voice revenues, which came in at | 1026.8 crore (down 33% YoY) vs. our estimate of | 1113.2 crore, with volumes of 8.7 billion minutes (down 19.4% YoY) and realisation of | 1.18 (16.9% YoY decline). Data revenues came in at | 2885.5 crore (up 3.9% YoY) EBITDA came in at | 555.4 crore, with margins of 14.2% vs. our estimate of | 550.4 crore (13.6% margin). Both voice and data margins...

Revenue fell by 2.58% to Rs. 4008.58 Cr in Q4FY18 when compared to the previous quarter. Tata Communications Ltd Q4FY18 results Comment

Tata Communication's (TCL) board has approved the scheme of reconstruction between Hemisphere Properties and itself, whereby TCL will transfer surplus land to Hemisphere for which equity share will be issued to shareholders of TCL in the ratio of 1:1. The record date for demerger, however, is awaited. The company has also indicated that...