ICICI Direct's research report on Tata Communications
Tata Communication Q3FY21 revenues were weak sequentially largely due to seasonality and COVID related weakness in deal conversion impacting data revenues growth. Topline came in at Rs 4223 crore, flattish YoY & down 4% QoQ with data revenues (forming ~84% of the revenues) up 3.8% YoY (down 2.6% QoQ). Consolidated EBITDA came in at Rs 1046 crore, up 37.5% YoY with margin at 24.8% (up 678 bps YoY) but down 153 bps QoQ as Q2FY21 one-off gain of Rs 43 crore and there was also an impact of Rs 31 crore, due to timing difference of revenue & cost recognition in Voice segment. The company reported a PAT of Rs 309 crore, (up 4.3x YoY, down 20% QoQ) with beat owing to lower depreciation and tax rate
We maintain BUY with a revised SoTP target price of Rs 1210/share, rolling over our valuations to FY23E.
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