Neotel sale will give a boost to Tata Communications: Dipan Mehta

In a chat with ET Now, Dipan Mehta, Member BSE and NSE, shares his views on Tata Communications.

ET Now: A word on Tata Communications?

Dipan Mehta: We were disappointed with the results. The numbers from last couple of quarters have been well below our expectations and the growth earning momentum has not come through.

Finally, after several months of negotiation and a lot of rumours Neotel has finally got sold and that is positive sign for the company because it reduces the debt and also improves all those ROEs, ROCs. Now, the overall managements focus will again be on improving the productivity of the assets.

Tata Communications is a great company and very valuable in terms of the networks and the businesses they operate in. It is just that the growth is bit lacking over and there is volatility in earnings but by and large investments have been put in place so it is a matter of the capacity utilisation increasing, hoping most of it will flow to the bottom line.

There are still a few businesses which can be restructured or knocked off and that could further improve the productivity but by and large this is a step in the right direction and while operationally we would expect the company to do far better.

Today’s gains are more on account of deal which was long pending. So, right now positive news flow is driving the stock.