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Neutral Tata Communications; target of Rs 1450: Motilal Oswal

Motilal Oswal recommended Neutral rating on Tata Communications with a target price of Rs 1450 in its research report dated January 20, 2022.

January 31, 2022 / 04:01 PM IST
 
 
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Motilal Oswal's research report on Tata Communications


Normalized EBITDA growth was soft at 2% (7% below our estimate), but the key silver lining was the steady net debt decline for the second quarter in a row by ~INR6b to INR71.9b on better working capital mix and robust OCF generation.  We expect 10% revenue CAGR over FY22-24E as Connectivity (~70% revenue mix) has a low growth outlook. We factor in an improvement in margin on a favorable Data mix, curbing of losses in the Incubation business, and 15% EBITDA CAGR. We maintain our Neutral rating.


Outlook


We maintain our Neutral rating with a TP of INR1,450/share (assigned 9x/3x EBITDA to the Data/Voice business).


For all recommendations report, click here

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first published: Jan 31, 2022 04:01 pm
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