Subscribe to PRO at just Rs.33 per month. Use code SUPERPRO
Last Updated : Feb 01, 2016 04:34 PM IST | Source: Moneycontrol.com

Sell Reliance Communications; target of Rs 40:Motilal Oswal

Motilal Oswal is bearish on Reliance Communication and has recommended sell rating on the stock with a target price of Rs 40 in its research report dated January 27, 2016.

  • bselive
  • nselive
Todays L/H
Motilal Oswal's research report on Reliance Communications

3Q revenue/EBITDA below estimates: RCOM’s 3QFY16 revenue declined 1.1%QoQ to INR53b (3% below estimate), led by lower India as well as global  revenues. EBITDA grew ~1% QoQ to INR18b (our estimate: INR18.7b). IndiaEBITDA grew ~1% QoQ to INR16.2b (4% below estimate). Global segment EBITDA grew ~4% QoQ to INR1.83b (our estimate: INR1.82b).

Valuation and view: The stock trades at EV/EBITDA of 8x FY16E and 7.5xFY17E. We are cutting our EBITDA estimates by 1-5%. Maintain Sell with a target price of INR40 based on FY18 EV/EBITDA of 6x for core business (exReliance JIO contract) and INR40b for upside from signed contracts with Reliance JIO (~5x steady-state EBITDA).

For all recommendations, click here

The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
First Published on Feb 1, 2016 04:34 pm