Buy Tata Communications, may test Rs 520-540: Ambareesh Baliga

Ambareesh Baliga, Independent Market Expert told CNBC-TV18, "When you are talking of telecom, when people are interested in Bharti Airtel, Idea Cellular and the rest of the pack, I am not too bullish, at least from the next 12-18 months point of view. But then at the back end, you have Tata Communications which actually provides that feeder, the data services and the voice services, this has been an ignored stock for a while. They were getting into new businesses where the margins were not really great, in fact, that was spoiler for them." "If you look at their data business, the actual margins is in the region of about 25-26 percent can go up to 30 percent, but then the margins were reported lower because of some other loss making businesses. Now, that has stabilised to a large extent. And the other big kicker for Tata Communications which was there for the last 10-12 years but had not played out was actually their land bank and the properties which they have which are actually meant or the government and the retail shareholders as and when it is sold," he said."I believe there is some action at the government level for this to start being sold off. And that could work out to approximately about Rs 8,000-9,000 crore whereas when you look at the market cap, it is just about Rs 12,000 crore. So, this could be a big kicker for Tata Communications going ahead.""At the current level, there is not much of a downside, a seven times enterprise value (EV) by earnings before interest, taxes, depreciation and amortisation (EBITDA). So, at the current level, one could look at buying it, may be could see levels of about Rs 520-540," he added.