Hold Tata Communications: Indiabulls Securities

"Tata Communications Ltd (TCL)’s revenue on a standalone basis grew by mere 4.3% yoy to Rs. 8.9 billion in Q4’09 owing to the sluggish wholesale voice business. However, EBITDA grew by 20.7% yoy to Rs. 1.8 billion with margins improving by 272 bps to 20.1% on the back of better network utilisation in both voice and data business. Based on the below-mentioned upsides emerging in the core business, we upgrade our Sum-of-the-parts (SOTP) based target price to Rs. 451. The stock at current market price of Rs. 473.25 looks fairly valued and thus, we upgrade our rating to Hold on the stock," says Indiabulls Securities' research report.

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