Motilal Oswal's research report on Tata Communications
TCOM’s consolidated EBITDA grew 3%, led by a 63% jump in Voice EBITDA, even as Data EBITDA, the key valuation driver, remained muted. FCF remained strong, coupled with a healthy 9% deleveraging of INR6b. We have marginally reduced our consolidated EBITDA, factoring in 13% CAGR over FY22-24 and reduction in losses in the Incubation segment over time, even as the Digital Platform and Services has seen modest growth in the last couple of years. FCF generation and deleveraging remains the silver lining, aiding valuation.
Outlook
We maintain our Neutral rating. We maintain our Neutral rating with a TP of INR1,100/share (assigned 7.5x/3x EBITDA to the Data/Voice business).
More Info
At 17:30 Tata Communications was quoting at Rs 1,058.50, down Rs 19.10, or 1.77 percent.
It has touched an intraday high of Rs 1,092.35 and an intraday low of Rs 1,047.00.
It was trading with volumes of 109,525 shares, compared to its thirty day average of 49,023 shares, an increase of 123.42 percent.
In the previous trading session, the share closed up 9.99 percent or Rs 97.90 at Rs 1,077.60.
The share touched its 52-week high Rs 1,590.00 and 52-week low Rs 856.00 on 17 January, 2022 and 15 June, 2022, respectively.
Currently, it is trading 33.43 percent below its 52-week high and 23.66 percent above its 52-week low.
Market capitalisation stands at Rs 30,167.25 crore.
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