Buy One97 Communications, target price Rs 865: Motilal Oswal Financial Services

Motilal Oswal Financial Services has buy call on One97 Communications with a target price of Rs 865. The current market price of One97 Communications Ltd. is Rs 664.5.

One97 Communications key Products/Revenue Segments include Sale of services and Other Operating Revenue for the year ending 31-Mar-2022.

Financials

For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 2140.20 Crore, up 6.29 % from last quarter Total Income of Rs 2013.60 Crore and up 39.57 % from last year same quarter Total Income of Rs 1533.40 Crore. Company has reported net profit after tax of Rs -397.10 Crore in latest quarter.

The company’s top management includes Mr.Vijay Shekhar Sharma, Mr.Douglas Feagin, Mr.Ravi Chandra Adusumalli, Mr.Mark Schwartz, Ms.Pallavi Shardul Shroff, Mr.Ashit Lilani, Mr.Neeraj Arora, Mr.Madhur Deora. Company has Price Waterhouse Chartered Accountants LLP as its auditors. As on 31-03-2023, the company has a total of 63 Crore shares outstanding.

Investment Rationale
The brokerage estimates Paytm to achieve an overall EBITDA break-even by FY25. Motilal Oswal values the stock at INR865 based on 18x FY28E EV/EBITDA and discounting the same to FY25E at ~15%, which implies 4.5x FY25E P/Sales.

Promoter/FII Holdings
Promoters held 0 per cent stake in the company as of 31-Mar-2023, while FIIs owned 71.83 per cent, DIIs 3.19 per cent.