A part of the Tata Group of companies, it runs the brand name Tata Indicom and another Tata company,Tata Teleservices, holds a 38% stake in the company. It was formed after acquisition of the erstwhile Hughes Telecom (India), and was then renamed as Tata Teleservices (Maharashtra) and offers telecom services using CDMA technology. It is licensed to provide telecommunication services in the states of Maharashtra (including Mumbai) and Goa. It has invested about Rs.3,000 crore in state-of-the-art infrastructure in these states.
It has over 1.29 million customers in Maharashtra and Goa and offers telephony and ISP services in the cities of Mumbai and Navi Mumbai, and 137 towns across Maharashtra.
The financial performance has been consistently bad. The only saving grace being the factor of “consistency”. What is suprising is that the compnay, despite operating in such lucrative states, Maharashtra and Goa, is unable to make profits.
For the third quarter ended 31st December 2007, on a QoQ basis, the net sales of the company rose 5% at Rs.439.76 crore. Operating expenses rose 3% and the company’s EBIDTA was at Rs.128.33 crore, up by 20%. OPM improved from 25.45% to 29.18%.
The total expenditure stood at Rs.444.88 crore of which 26% was on account of depreciation, another 25% was due to interconnect and access costs. The company, in Q3 FY08, spent Rs.76.13 crore on marketing and promotional costs.
Even after the interest outgo of Rs.41.92 crore, the company managed to stay in the positive zone but it was only after this that company slipped into the red. The main culprit being the big bill of Rs.113.71 crore on account of depreciation. This ate away most of the margins and dragged the company into losses. This has always been the trend, that’s the “consistency” factor at work here. So at the end of it all, the company reported a loss before tax of Rs.27.30 crore as against a loss of Rs.49.04 crore in Q2. Net loss was at Rs.27.43 crore as against Rs.49.31 crore in Q2 and Rs.59.17 crore in Q3 FY07. So the only solace being that at least the losses are coming down!
During the nine month ended December 31, 2007, Foreign Currency Convertible Bond(FCCB) holders holding bonds of the value aggregating to $46.18 million exercised their option to convert their holding to equity thus resulting in an increase in the paid up equity share capital by Rs.83.75 crore.
The DoT had allowed telecom service providers to use alternate technology under their existing Unified Access Service Licences after obtaining DoT approval and on payment of the prescribed fee. Accordingly, the company had applied for GSM spectrum for the Telecom Circles of Maharashtra and Goa, and had paid non-refundable fee of Rs.393 crore. Since then it has received the ‘in principal approval’ from the DoT.
The stock is currently quoted at Rs.33 and this has certainly come down from a high of Rs.65 it had touched in January, which was in anticipation that the company might manage to turnaround.
The company might take some time to come out of the woods fully. Stay invested only if you have the patience and have money, which you don’t mind lying idle for some time now.
It has over 1.29 million customers in Maharashtra and Goa and offers telephony and ISP services in the cities of Mumbai and Navi Mumbai, and 137 towns across Maharashtra.
The financial performance has been consistently bad. The only saving grace being the factor of “consistency”. What is suprising is that the compnay, despite operating in such lucrative states, Maharashtra and Goa, is unable to make profits.
For the third quarter ended 31st December 2007, on a QoQ basis, the net sales of the company rose 5% at Rs.439.76 crore. Operating expenses rose 3% and the company’s EBIDTA was at Rs.128.33 crore, up by 20%. OPM improved from 25.45% to 29.18%.
The total expenditure stood at Rs.444.88 crore of which 26% was on account of depreciation, another 25% was due to interconnect and access costs. The company, in Q3 FY08, spent Rs.76.13 crore on marketing and promotional costs.
Even after the interest outgo of Rs.41.92 crore, the company managed to stay in the positive zone but it was only after this that company slipped into the red. The main culprit being the big bill of Rs.113.71 crore on account of depreciation. This ate away most of the margins and dragged the company into losses. This has always been the trend, that’s the “consistency” factor at work here. So at the end of it all, the company reported a loss before tax of Rs.27.30 crore as against a loss of Rs.49.04 crore in Q2. Net loss was at Rs.27.43 crore as against Rs.49.31 crore in Q2 and Rs.59.17 crore in Q3 FY07. So the only solace being that at least the losses are coming down!
During the nine month ended December 31, 2007, Foreign Currency Convertible Bond(FCCB) holders holding bonds of the value aggregating to $46.18 million exercised their option to convert their holding to equity thus resulting in an increase in the paid up equity share capital by Rs.83.75 crore.
The DoT had allowed telecom service providers to use alternate technology under their existing Unified Access Service Licences after obtaining DoT approval and on payment of the prescribed fee. Accordingly, the company had applied for GSM spectrum for the Telecom Circles of Maharashtra and Goa, and had paid non-refundable fee of Rs.393 crore. Since then it has received the ‘in principal approval’ from the DoT.
The stock is currently quoted at Rs.33 and this has certainly come down from a high of Rs.65 it had touched in January, which was in anticipation that the company might manage to turnaround.
The company might take some time to come out of the woods fully. Stay invested only if you have the patience and have money, which you don’t mind lying idle for some time now.
Source: sptulsian.com
