Hold Tata Comm, says Irani

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Hold Tata Comm, says Irani

Mehraboon Irani, VP-PMS, Centrum Broking is of the view that one can hold Tata Communication.

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Excerpts from Your Stocks on CNBC-TV18 Watch the full show » ALSO READ See previous views by Mehraboon Irani See what other Experts & Brokerages are saying about Tata Comm See messages about Tata Comm Tata Comm BSE | NSE 25/05/12 Are Mutual Funds betting on Tata Comm?

Mehraboon Irani , VP-PMS, Centrum Broking is of the view that one can hold Tata Communication .

Irani told CNBC-TV18, "Tata Communications main business has been the wholesale voice segment which has contributed nearly 58% of its revenues in 2008-09 also the earnings and there was a profit figure due to the sales of shares of Tata Teleservices. But having said that the factors of the company have done wonders as far as cost cutting goes. The company has about 53-52% of the market share in wholesale voice in this segment, and this should grow in terms of volume and the concern is that there could be some pricing pressure. So towards this plan the company has started quite aggressively on the retail front, it is also trying to add value towards its P&L account by working on customized value added services, so there has been concerns as far as the fact that there is too much debt in the books."

He further added, "Also the funding as far as the acquisitions with the company and the auctions which are going to take place in this space but at this funding can be taken care of the company which I believe and that would put some more upside in this stock. So while one looks at it purely from a valuation angle the stock may look a little bit expensive. I have reasons to believe that there could be still 10-15% upside from the present level. One can buy this stock if he/she is looking at some short term opportunity, if you look at conservative parameters, the stock looks fully valued at the moment. So it could be a hold recommendation from my side as far as this stock goes."

Disclosure: It is safe to assume that analyst and his clients may have an investment interest in the above stock/sector.