Buy Tata Communications, target price Rs 1155: Emkay Global

Emkay Global has buy call on Tata Communications with a target price of Rs 1155. The current market price of Tata Communications is Rs 885.05. Time period given by analyst is one year when Tata Communications Ltd. price can reach defined target.

Tata Communications Ltd., incorporated in the year 1986, is a Mid Cap company (having a market cap of Rs 24953.18 Crore) operating in Telecommunications sector.

Tata Communications Ltd. key Products/Revenue Segments include Telecommunication Services for the year ending 31-Mar-2022.



Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 4526.55 Crore, up 7.68 % from last quarter Total Income of Rs 4203.69 Crore and up 9.58 % from last year same quarter Total Income of Rs 4130.95 Crore. Company reported net profit after tax of Rs 366.21 Crore in latest quarter.

Investment Rationale
The brokerage cuts FY23-25E EBITDA by 3-8% due to the delay in revenue recovery and lower margins (closer to management's guided range). It cuts target multiple for Data segment to 8x (Jun'24E EBITDA) from 10.5x and arrive at a revised SOTP based TP of Rs1,155.

Promoter/FII Holdings
Promoters held 58.86 per cent stake in the company as of 31-Mar-2022, while FIIs owned 19.38 per cent, DIIs 11.49 per cent.