Neutral Tata Communications; target of Rs 950: Motilal Oswal
Motilal Oswal recommended Neutral rating on Tata Communications with a target price of Rs 950 in its research report dated January 20, 2021.
February 02, 2021 / 09:13 PM IST
Motilal Oswal's research report on Tata Communications
Tata Communications (TCOM)’s 3QFY21 revenue/EBITDA was a miss due to lower-than-expected earnings reported in both the Data and Voice segments – due to seasonality and slower deal conversions. However, excluding a one-time cost benefit from 2QFY21, the EBITDA miss stands at 5.9% (v/s 9.5% on total EBITDA). n We reduce our revenue/EBITDA estimates for FY21 by 3%/4% and for FY22 by 7%/5% due to lower-than-expected earnings and slower deal conversions.
We assign 7x/2x to Data/Voice business EBITDA, with implied EV/EBITDA of 5.9x, arriving at TP of INR950 (earlier INR940). Maintain Neutral.
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