Neutral on Tata Communications, target price Rs 950: Motilal Oswal

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Neutral on Tata Communications, target price Rs 950:  Motilal Oswal


Motilal Oswal has neutral call on Tata Communications Ltd. with a target price of Rs 950. The current market price of Tata Communications Ltd. is Rs 1059.35.

Tata Communications Ltd., incorporated in the year 1986, is a Mid Cap company (having a market cap of Rs 30200.03 Crore) operating in Telecommunications sector.

Financials
For the quarter ended 31-12-2020, the company reported a Consolidated sales of Rs 4222.83 Crore, down 4.05 % from last quarter Sales of Rs 4401.08 Crore and down 0.14 % from last year same quarter Sales of Rs 4228.72 Crore. Company reported net profit after tax of Rs 310.35 Crore in latest quarter.

Investment Rationale
The brokerage have rolled out EV/EBITDA multiple to FY23. It assigns 7x/2x to Data/Voice business EBITDA, with implied EV/EBITDA of 5.9x, arriving at TP of Rs 950 (earlier INR940).


Promoter/FII Holdings
Promoters held 75 per cent stake in the company as of Dec 30, 2020, while FIIs held 17.7 per cent, DIIs 1.4 per cent and public and others 6 per cent.





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