Tulip Telecom (BSE: 532691) Century Partners; MN
Sector: Telecommunications- Service
Prepared on: May 23rd 2012, Quote: Rs. 70; Rating: Buy
Updated on Jul 20th 2012, Current Market Price: Rs. 115; Re-Rating: BuyHead Office: New Delhi, India; Established: 1992
Recommendation: Buy, Target Price: Rs. 170 by June 2013
We believe considering the Margin Of Safety of 48%, present price per share of
Tulip Telecom Ltd.
atRs. 115 (Jul 20th, 2012) is undervalued by a considerable margin to it's Intrinsic Value of Rs. 170.
We think in an emerging market like India there is lot of room for growth in the Enterprise Data Services(EDS) segment just to come at par with the global benchmark. Tulip Telecom's able management haspositioned itself well to take advantage of this growth opportunity.
Conversions: $1 = Rs. 55; Rs. 1 Crore = $181,000; 1Cr = 10 million, 1 Lakh = 100,000
Intrinsic Value(from DCF Analysis):Rs. 170Margin of Safety: 48%Risk: LowCurrent Price:Rs. 115Avg. Daily Volume: $1mm+52 Week Range:Rs. 70 - Rs. 167Market Cap:Rs. 1730 Cr($314million)Revenues 2011:Rs. 2350Cr ($427mm)EPS: Rs. 21.74P/B: 1.13P/E: 5.5(Avg. P/E of Last 6 years: 10)EV/EBITDA: 4.9(Avg. EV/EBITDA of Last 6 years: 7) Margins(EBITDA: 29%,PAT: 13%)Debt/Equity: 1.44EBITDA 5Yr. Avg.:15%ROE: 26% Div & Yield:Rs. 1.54 (1.34%)Total Income 5Yr.Growth Rate: 18%Current Ratio: 2.04 Quick Ratio: 3.63Book Value/Share:Rs.105ROCE: 20%Share Holding:Promoters Holdings: 69.9%Institutional:20.3%