Emkay Global Financial's report on Tata Communications
In the analyst meet, TCOM management reiterated its strategy regarding platform transformation with a focus on product innovation, new launches, higher customer wallet share and financial fitness to accelerate topline growth. The strategy of ‘deeper with fewer’ is working well in the India Enterprise segment, which has seen market share gains. New product launches, increasing feet on the street and joint GTM with TCS should help garner share gains in overseas markets too. Although the company has achieved its financial fitness targets in the last two years and now has a healthy balance sheet and strong cash-flows, it continues to be noncommittal on the timelines for achieving double-digit revenue growth in the Data segment.
We have cut FY23-25E EBITDA by 3-8% due to the delay in revenue recovery and lower margins (closer to management’s guided range). We cut target multiple for Data segment to 8x (Jun’24E EBITDA) from 10.5x and arrive at a revised SOTP based TP of Rs1,155.
At 13:20 hrs Tata Communications was quoting at Rs 892.00, down Rs 29.65, or 3.22 percent.
It has touched an intraday high of Rs 922.05 and an intraday low of Rs 856.00.
It was trading with volumes of 103,040 shares, compared to its thirty day average of 38,915 shares, an increase of 164.78 percent.
In the previous trading session, the share closed down 0.10 percent or Rs 0.90 at Rs 921.65.
The share touched its 52-week high Rs 1,590.00 and 52-week low Rs 906.30 on 17 January, 2022 and 26 May, 2022, respectively.
Currently, it is trading 43.9 percent below its 52-week high and 1.58 percent above its 52-week low.Market capitalisation stands at Rs 25,422.00 crore.
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