Moneycontrol
Feb 15, 2018 02:11 AM IST | Source: Moneycontrol.com

Buy Tata Communications; target of Rs 720: ICICI Direct

ICICI Direct is bullish on Tata Communications has recommended buy rating on the stock with a target price of Rs 720 in its research report dated February 12, 2018.

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ICICI Direct's research report on Tata Communications


One of the highlights of the quarter was superior margins in the data segment. Data margins at 18.7% saw a sequential improvement of 110 bps. The management attributed the same to cost optimisation coupled with a sharp expansion in high-margin traditional services business. In terms of data revenues, it grew 4.3% YoY (6.8% on a like-to-like basis). Growth services continued to drive overall data segment, up 38.5% YoY, while traditional data services revenues were up 5.7% YoY.


Outlook


We also build in impact of US$ 50 million on revenues, US$ 8 million on EBITDA, owing to closure of TTSL business. However, the recent stock price correction (10% since our last update), enables us to upgrade the stock to BUY, valuing it at Rs 720/share. The target price is inclusive of the value from the land bank.


For all recommendations report, click here


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