Hold Tata Communications, tgt Rs 439: Asit C. Mehta

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Hold Tata Communications, tgt Rs 439: Asit C. Mehta

Asit C. Mehta has initiated a hold rating on Tata Communications with a target price of Rs 439. Since the company is making huge investments the research firm has valued the stock using price to book value multiple.

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Asit C. Mehta has initiated a hold rating on Tata Communications with a target price of Rs 439 in its August 26, 2008 research report. "Since the company is making huge investments we have valued the stock using price to book value multiple. Historically the stock has traded mainly in the range between 2.3-2.5 times. Therefore on assigning the lower Price/Book Value multiple of 2.3 (which is consistent with the valuation of foreign peers) to the FY10 book value of Rs 191, we arrive at a target price of Rs 439. At present the stock is trading a price of Rs 413, we therefore initiate coverage on Tata Communications with a "HOLD" recommendation," says Asit C. Mehta's research report.

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