ICICI Securities maintains hold on Tata Communications, revises target to Rs 371

ICICI Securities has maintained hold rating on Tata Communications in the long term and revised target price to Rs 371 from Rs 311. Shares of Tata Communications ended down 1.2% at Rs 367.75 on Monday while BSE sensex closed 21.47 points up to 40,345.08.

Company Financials

For the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 4272.76 crore, up 2.50% from last quarter sales of Rs 4168.62 crore and up 5.03% from last year same quarter sales of Rs 4068.22 crore. The company has reported net profit after tax of Rs 52.52 crore in the latest quarter.


Investment Rationale

Tata Communications' total contract value wins have been healthy at US$500 million driven by Growth Services, said ICICI Securities. The disappointment for the quarter was slower growth in Growth Services and lower margin in TCTS, while the management expects recovery in coming quarters and believes operating profit margin expansion will continue, it said. The brokerage has increased operating profit estimate by 1.4-1.5%.