The stk. can move up sharply from here on short covering. It also offers medium & long term investors to entre at these levels. The beating of the stock is more based on market meltdown & surface reading of results. The value & power of Docomo brand is nowhere been realised/recognised. The game in wireless from now onwards is based on value added services, & Docomo is world leader.
tata tele is doing all the right things for getting more and more subscribers however all this requires a lot of money which they dont have, yes thay have the tata name and assets but no liquid cash. the moey they recieved from the stake sale has been spen on the gsm launch. But still there is tower infra they subsidery 21st century infra is a loss making firm and lets face it their network suks.
tata tele is goin in for another wild move and rasing more capital already with such a heavy equity base + pilling on of debt in this poor company by the management it will take another 10 years to show net profits.
This q results the net loss was more than a 100 cr on turnover of 500.
even if you take the best case senireo for this company with all the compitation and per second billing it will not do more than 700 - 800 cr sale per quarter, & asume a margin of 23% that 184 cr in gross profit - the intrest and depp.
they already have 189 cr equity shares + they want to raise another 1000 cr assume at rs 26 a share that 38 cr shares additional taking the equity base to 2000 cr thats 200 cr shares more or less.
with 100 odd cr depp and 95 odd cr intrest which will only rise ( per quarter ).
This company will never be profitable.
the telcom sector trades at a pe of 12.
To be valued at rs 24 tata tele should show atlease 400 cr net profit each year. if one back calculates
TTML works on 20 - 22 % gp margins. it shows 600 - 800 cr in intrest cost and depp each year.
to make a np/ before tax of 400 cr their gp should be atlease 1000 cr. with 20% margins their turnover should atleast be 5000 cr. that double from today.
Tata Tele to raise $ 250-mn to fund expansion plans
5 Nov 2009, 1954 hrs IST, PTI
MUMBAI: Tata Teleservices (Maharashtra) Ltd, plans to raise $ 250-mn to fund its expansion plans, a top company official said.
"We have received approvals to raise $250-mn at any time. The company`s Board will have to take a call," Tata Tele`s Managing Director, Mukund Rajan, told PTI here today.
The company has already obtained shareholders` permission for raising $250-mn through FCCBs, which has not been exercised.
The positive market response to the company`s offerings in an extremely competitive and volatile market could require advancement of planned capital expenditure.
"Our capital expenditure for this year was in excess of Rs 1,000-crore, which was already spent. Thanks to the response to our GSM plan, we have advanced Q4 capex to Q3. Towards the end of Q3, we should be in a position to take a decision on further capital expenditure plan," Rajan said.
The company has applied for additional spectrum of GSM of 4.4 MHz to 6.2 MHz in Mumbai and Maharashtra, he said.
The company which adopted Tata DoCoMo`s per second tariff plan for its GSM services in Mumbai and Maharashtra believes the current pricing is profitable.
Thanks for your efforts in getting the news to this borad. i think you also traped in TTML and Satyam like me...all this news bring back the TTML to 35/share?
Dear Gordan, Ur analysis is alright mathematically but it is based on past data. The Game changer here is Docomo. And the Ace is Value added services. The Margin picture will be based hereon on VAS`s. Docomo has already gone through such phases of competion & emerged winner worldwide. From now onwards it will be more of quality subscribers that matter not just the no.`s.
| NIFTY 
