Hold Tata Communications; target of Rs 670: ICICI Direct
ICICI Direct has recommended hold rating on Tata Communications with a target price of Rs 670 in its research report dated July 26, 2017.
July 27, 2017 / 05:21 PM IST
ICICI Direct’s research report on Tata Communications
Revenues came in a t | 4310 crore vs. our estimate of | 4235 crore. The beat was due to voice revenues, which came in at | 1533.4 crore vs. our estimate of | 1437.7 crore, as volumes of 10.8 billion minutes (decline of 3.6% YoY), were higher than estimated 10.2 billion minutes (8.7% YoY decline) . Data revenues at | 2776.6 crore (underlying growth of 4.6% YoY) was largely in line with our estimate of | 2797.7 crore. The data business growth would have been higher but for disappointment in payment solutions business (decline of 35.7% YoY), which continues to be impacted by demonetisation woes.
We maintain our HOLD recommendation valuing it at | 6 7 0 /share. The target price is inclusive of the value from the land bank (after a fair discount of 30%). Any quick resolution in the land monetisation process would be an upside risk.
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