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Last Updated on: 05 October, 2024
Author: Getaka|Social: Getaka Financial Services X (Earlier Twitter) Profile Getaka Financial Services LinkedIn Logo

Tata Communications Ltd: Intrinsic Value and Fundamental Analysis

Share Price and Basic Stock Data

Last Updated: October 5, 2024, 10:03 pm

Market Cap 59,338 Cr.
Current Price 2,082
High / Low2,175/1,543
Stock P/E72.1
Book Value 62.7
Dividend Yield0.80 %
ROCE17.6 %
ROE65.2 %
Face Value 10.0
PEG Ratio0.67

Stock P/E, Current Price, and Intrinsic Value Over Time

View Share Price Target for Tata Communications Ltd

Competitors of Tata Communications Ltd

Stock NameMarket CapCurrent PriceHigh / LowStock P/EBook ValueDividend YieldROCEROEFace Value
Industry Average0 Cr0000%0.59%0.49%0

All Competitor Stocks of Tata Communications Ltd

Quarterly Result

MonthDec 2020Mar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023
Sales4,2234,0734,1034,1744,1854,2634,3114,4314,5284,5694,7714,8725,633
Expenses3,1773,0583,1173,0613,1023,2183,2333,3013,4513,5343,7473,8574,499
Operating Profit1,0461,0159861,1131,0821,0451,0771,1301,0771,0341,0241,0151,134
OPM %25%25%24%27%26%25%25%26%24%23%21%21%20%
Other Income-359194927243234113316219125-174
Interest10493969183908098123132131137188
Depreciation557595532542542589537552555618580605619
Profit before tax381386377530484609694593431345504298154
Tax %19%23%21%20%20%40%23%11%10%8%26%26%74%
Net Profit30929929742639336954553439532738222145
EPS in Rs10.8510.5010.3914.9313.8712.8119.0818.6813.8211.4413.397.741.57

Last Updated: Unknown

Quarterly Chart

Profit & Loss - Annual Report

Last Updated: Unknown

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023TTM
Sales14,19617,21317,71419,91318,14917,62016,77216,52517,06817,10016,72517,83819,846
Expenses12,40515,15315,70816,91915,71415,21414,35913,78013,77912,84012,49813,52015,638
Operating Profit1,7912,0602,0062,9942,4342,4062,4122,7453,2894,2614,2274,3184,208
OPM %13%12%11%15%13%14%14%17%19%25%25%24%21%
Other Income145331717291821,294-11662-32182338440104
Interest834794427751409367344397471420360432588
Depreciation1,8202,0271,8522,1611,8641,8661,9062,0682,3582,3142,2052,2622,422
Profit before tax-718-4314443732431,467463431401,6092,0002,0631,301
Tax %-9%-51%77%99%96%16%778%80%162%22%26%14%
Net Profit-788-6511033101,235-326-80-851,2521,4851,801975
EPS in Rs-27.88-21.873.560.050.3043.26-11.53-2.89-3.0243.8851.9963.0234.14
Dividend Payout %-7%-14%126%12,151%1,412%14%-39%-156%-133%32%40%33%

Profit & Loss Yearly Chart

YoY Net Profit Growth

Year2012-20132013-20142014-20152015-20162016-20172017-20182018-20192019-20202020-20212021-20222022-2023
YoY Net Profit Growth (%)17.39%115.82%-97.09%233.33%12250.00%-126.40%75.46%-6.25%1572.94%18.61%21.28%
Change in YoY Net Profit Growth (%)0.00%98.44%-212.91%330.42%12016.67%-12376.40%201.86%-81.71%1579.19%-1554.33%2.67%

Tata Communications Ltd has shown an inconsistent trend in YoY Net Profit Growth (%) in the last 11 years from 2012-2013 to 2022-2023.

Growth

Compounded Sales Growth
10 Years:2%
5 Years:5%
3 Years:7%
TTM:19%
Compounded Profit Growth
10 Years:30%
5 Years:73%
3 Years:-5%
TTM:-48%
Stock Price CAGR
10 Years:24%
5 Years:42%
3 Years:12%
1 Year:13%
Return on Equity
10 Years:%
5 Years:%
3 Years:126%
Last Year:65%

Last Updated: Unknown

Balance Sheet

Last Updated: Unknown

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Equity Capital285285285285285285285285285285285285
Reserves1,14051536-6481,307214-467-1,563-1706431,2331,501
Borrowings12,36213,69413,07614,2319,2148,9279,93512,41311,3949,1228,57711,263
Other Liabilities10,04110,45610,79811,23010,22810,13110,19810,9969,7979,58810,42411,316
Total Liabilities23,82824,95024,19525,09821,03319,55719,95122,13121,30619,63820,51924,365
Fixed Assets14,71114,91414,70414,44410,92910,79711,28912,76811,52010,93610,50013,467
CWIP7716536388007515203613494938521,1481,327
Investments1,3221,7581,7681,8372,4341,2501,4911,5632,2331,5651,9511,608
Other Assets7,0247,6257,0868,0176,9206,9906,8097,4517,0606,2846,9217,963
Total Assets23,82824,95024,19525,09821,03319,55719,95122,13121,30619,63820,51924,365

Reserves and Borrowings Chart

Cash Flow

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Cash from Operating Activity 2,4553,0623,0282,3632,3941,7131,8442,5253,1804,2044,3843,182
Cash from Investing Activity -2,481-2,280-1,908-2,313940-500-2,284-1,521-2,007-894-1,836-2,641
Cash from Financing Activity 320-186-1,388-9-3,276-959-28-942-1,205-3,431-2,241-813
Net Cash Flow293596-2684158254-46761-32-121308-272

Free Cash Flow

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023
Free Cash Flow1.00-10.00-11.00-11.00-12.00-7.00-6.00-7.00-9.00-7.00-5.00-4.00

Free Cash Flow = Income Generated from Operational Activities - Borrowings - Capital Work in Progress (CWIP)

Consistent positive free cash flow is crucial for businesses as it indicates their ability to generate cash from their core operations. It provides financial flexibility, allowing companies to invest in growth opportunities, pay dividends to shareholders, reduce debt, and weather economic downturns more effectively.

Free Cash Flow Chart

Financial Efficiency Indicators

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Debtor Days675646615464666956565665
Inventory Days
Days Payable
Cash Conversion Cycle675646615464666956565665
Working Capital Days-88-88-124-93-73-86-71-94-59-56-61-52
ROCE %2%4%8%7%23%8%8%9%18%22%24%18%

Financial Efficiency Indicators Chart

Share Holding Pattern

MonthSep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024Jun 2024
Promoters58.86%58.86%58.86%58.86%58.86%58.86%58.86%58.86%58.86%58.86%58.86%58.86%
FIIs23.45%21.57%19.38%17.88%17.02%17.28%16.99%17.18%17.53%19.20%18.24%18.09%
DIIs7.63%8.85%11.49%12.93%13.89%13.92%14.02%14.07%13.55%12.12%13.14%13.15%
Public10.06%10.72%10.26%10.33%10.22%9.92%10.11%9.88%10.06%9.81%9.77%9.91%
No. of Shareholders1,06,4861,19,4871,44,9791,74,9481,75,0171,66,1161,82,9401,70,8571,85,9761,95,6981,93,1572,03,417

Shareholding Pattern Chart

No. of Shareholders

Mutual Fund Holdings

Fund NameNo of SharesAUM (%)Amount Invested (Cr)Previous Number of SharesPrevious DatePercentage Change
HDFC Mid-Cap Opportunities Fund - Regular Plan9,642,2723.351603.751,739,9862024-10-04454.16%
Axis Midcap Fund2,198,4441.66365.661,739,9862024-10-0426.35%
Mirae Asset Emerging Bluechip Fund2,069,6201.22344.231,739,9862024-10-0418.94%
Mirae Asset Midcap Fund1,739,9862.46289.41,739,9862024-10-040%
Kotak Equity Arbitrage Fund - Regular Plan1,051,0000.6174.811,739,9862024-10-04-39.6%
HSBC Midcap Fund841,9001.75140.031,739,9862024-10-04-51.61%
Quant Mid Cap Fund739,0773.76122.931,739,9862024-10-04-57.52%
Invesco India Arbitrage Fund697,0001.34115.931,739,9862024-10-04-59.94%
HDFC Large and Mid Cap Fund - Regular Plan602,7220.84100.251,739,9862024-10-04-65.36%
Tata Large & Mid Cap Fund - Regular Plan600,0001.999.81,739,9862024-10-04-65.52%

ROCE Trend

EPS Trend

Key Financial Ratios

MonthMar 24Mar 23Mar 22Mar 21Mar 20
FaceValue10.0010.0010.0010.0010.00
Basic EPS (Rs.)33.9863.0251.9943.88-3.02
Diluted EPS (Rs.)33.9763.0251.9943.88-3.02
Cash EPS (Rs.)119.97141.36129.21125.1879.67
Book Value[Excl.RevalReserv]/Share (Rs.)62.8254.3433.555.04-44.69
Book Value[Incl.RevalReserv]/Share (Rs.)62.8254.3433.555.04-44.69
Revenue From Operations / Share (Rs.)735.75625.90586.83600.00598.88
PBDIT / Share (Rs.)158.34164.26159.96154.99117.85
PBIT / Share (Rs.)71.6884.9082.6173.8135.12
PBT / Share (Rs.)40.8172.4070.1756.444.90
Net Profit / Share (Rs.)33.3261.9951.8543.99-3.05
NP After MI And SOA / Share (Rs.)33.9863.0251.9943.88-3.02
PBDIT Margin (%)21.5226.2427.2525.8319.67
PBIT Margin (%)9.7413.5614.0712.305.86
PBT Margin (%)5.5411.5611.959.400.81
Net Profit Margin (%)4.529.908.837.33-0.50
NP After MI And SOA Margin (%)4.6110.068.857.31-0.50
Return on Networth / Equity (%)54.20118.29159.741083.170.00
Return on Capital Employeed (%)18.7522.4720.9515.509.27
Return On Assets (%)3.948.737.535.86-0.38
Long Term Debt / Equity (X)2.663.306.4676.97-5.32
Total Debt / Equity (X)5.664.968.5184.89-7.11
Asset Turnover Ratio (%)0.920.880.360.340.34
Current Ratio (X)0.430.590.570.750.52
Quick Ratio (X)0.430.570.570.740.51
Dividend Payout Ratio (NP) (%)61.8032.8426.929.11-175.39
Dividend Payout Ratio (CP) (%)17.4014.5310.823.196.63
Earning Retention Ratio (%)38.2067.1673.0890.89275.39
Cash Earning Retention Ratio (%)82.6085.4789.1896.8193.37
Interest Coverage Ratio (X)7.0110.8212.6510.517.13
Interest Coverage Ratio (Post Tax) (X)2.844.915.094.161.64
Enterprise Value (Cr.)66599.8241978.0542182.7439184.8914828.06
EV / Net Operating Revenue (X)3.182.352.522.290.86
EV / EBITDA (X)14.768.979.258.874.41
MarketCap / Net Operating Revenue (X)2.731.992.091.770.38
Retention Ratios (%)38.1967.1573.0790.88275.39
Price / BV (X)32.0923.3737.73262.29-5.20
Price / Net Operating Revenue (X)2.731.992.091.770.38
EarningsYield0.010.050.040.04-0.01

Profitability Ratios (%)

Liquidity Ratios

Liquidity Ratios (%)

Interest Coverage Ratios (%)

Valuation Ratios

Fair Value

Fair Value of Tata Communications Ltd as of October 5, 2024 is: ₹2,971.06

Calculation basis:

  • Fair value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.

This formula allows us to gauge the fair value of the stock by analyzing its fundamental indicators.

As of October 5, 2024, Tata Communications Ltd is Undervalued by 42.70% compared to the current share price ₹2,082.00

Intrinsic Value of Tata Communications Ltd as of October 5, 2024 is: ₹6,155.07

Calculation basis:

  • Intrinsic value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100) * (1 + EPS CAGR for Last 5 Years)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.
  • EPS CAGR (Compound Annual Growth Rate): Represents the geometric mean growth rate of earnings per share over the last 5 years. It provides insight into the historical growth trajectory of the company's earnings.

This formula allows us to gauge the intrinsic value of the stock by analyzing its fundamental indicators along with EPS growth.

As of October 5, 2024, Tata Communications Ltd is Undervalued by 195.63% compared to the current share price ₹2,082.00

Last 5 Year EPS CAGR: 107.17%

*Investments are subject to market risks

Strength and Weakness

StrengthWeakness
  1. The stock has a low average Working Capital Days of -78.75, which is a positive sign.
  2. The company has shown consistent growth in sales (16.92 cr) and profit (34.38 cr) over the years.
  1. The stock has a low average ROCE of 12.58%, which may not be favorable.
  2. The stock has a high average Cash Conversion Cycle of 59.67, which may not be favorable.
  3. The company has higher borrowings (11,184.00) compared to reserves (311.75), which may suggest financial risk.

Stock Analysis

  • Considering all of the following key financial indicators, prospective investors are encouraged to conduct thorough research and seek professional guidance before considering any investment in Tata Communications Ltd:
    1. Net Profit Margin: 4.52%
      • Net Profit Margin: This metric indicates the percentage of profit a company makes from its total revenue. A higher net profit margin is generally desirable as it reflects better profitability.
    2. ROCE: 18.75% (Industry Average ROCE: 0.59%)
      • ROCE (Return on Capital Employed): ROCE measures a company's profitability and the efficiency with which its capital is employed. A higher ROCE indicates efficient use of capital.
    3. ROE%: 54.2% (Industry Average ROE: 0.49%)
      • ROE (Return on Equity): ROE measures a company's profitability relative to shareholders' equity. A higher ROE indicates efficient use of shareholders' funds.
    4. Interest Coverage Ratio (Post Tax): 2.84
      • Interest Coverage Ratio: The interest coverage ratio measures a company's ability to cover its interest payments on outstanding debt. A ratio greater than 2 is generally considered healthy as it indicates the company can meet its interest obligations comfortably.
    5. Quick Ratio: 0.43
      • Quick Ratio: The quick ratio assesses a company's ability to cover its short-term liabilities with its most liquid assets. A ratio higher than 1 suggests the company can meet its short-term obligations without relying heavily on inventory.
    6. Stock P/E: 72.1 (Industry average Stock P/E: 0)
      • Stock P/E (Price-to-Earnings) Ratio: The P/E ratio compares a company's current share price to its earnings per share. A lower P/E ratio relative to industry peers or historical values may indicate that the stock is undervalued.
    7. Total Debt / Equity: 5.66
      • Total Debt / Equity: This ratio measures a company's financial leverage by comparing its total debt to its total equity. A lower ratio indicates lower financial risk and greater financial stability.
    The current analysis is available for review. It's important to conduct thorough research and consider consulting with financial professionals before making any investment decisions.
    Stock Rating:

About the Company - Qualitative Analysis

Tata Communications Ltd. is a Public Limited Listed company incorporated on 19/03/1986 and has its registered office in the State of Maharashtra, India. Company’s Corporate Identification Number(CIN) is L64200MH1986PLC039266 and registration number is 039266. Currently Company is involved in the business activities of Other satellite telecommunications activities. Company’s Total Operating Revenue is Rs. 6587.35 Cr. and Equity Capital is Rs. 285.00 Cr. for the Year ended 31/03/2022.
INDUSTRYADDRESSCONTACT
Telecom ServicesVSB, Mahatma Gandhi Road, Mumbai Maharashtra 400001investor.relations@tatacommunications.com
http://www.tatacommunications.com
Management
NamePosition Held
Ms. Renuka RamnathChairperson & Independent Director
Mr. A S LakshminarayananManaging Director & CEO
Mr. Ankur VermaNon Executive Director
Mr. N Ganapathy SubramaniamNon Executive Director
Mr. Ashok SinhaIndependent Director
Mr. Krishnakumar NatarajanIndependent Director

FAQ

What is the latest fair value of Tata Communications Ltd?

The latest fair value of Tata Communications Ltd is ₹2971.06.

What is the Market Cap of Tata Communications Ltd?

The Market Cap of Tata Communications Ltd is 59,338 Cr..

What is the current Stock Price of Tata Communications Ltd as on 05 October 2024?

The current stock price of Tata Communications Ltd as on 05 October 2024 is ₹2,082.

What is the High / Low of Tata Communications Ltd stocks in FY 2024?

In FY 2024, the High / Low of Tata Communications Ltd stocks is 2,175/1,543.

What is the Stock P/E of Tata Communications Ltd?

The Stock P/E of Tata Communications Ltd is 72.1.

What is the Book Value of Tata Communications Ltd?

The Book Value of Tata Communications Ltd is 62.7.

What is the Dividend Yield of Tata Communications Ltd?

The Dividend Yield of Tata Communications Ltd is 0.80 %.

What is the ROCE of Tata Communications Ltd?

The ROCE of Tata Communications Ltd is 17.6 %.

What is the ROE of Tata Communications Ltd?

The ROE of Tata Communications Ltd is 65.2 %.

What is the Face Value of Tata Communications Ltd?

The Face Value of Tata Communications Ltd is 10.0.

About the Author

Author Avatar
Getaka

Getaka, CFA, a financial analyst with 15 years of experience in the industry. Getaka holds an MBA degree and the Chartered Financial Analyst designation, demonstrating his profound understanding of financial analysis and investment management. Throughout his career, he has conducted numerous financial analyses and due diligence processes for companies in the industry, and has a strong track record of identifying key trends and opportunities. He leverages his expertise to deliver a thorough financial analysis of a company, encompassing its financial performance, key ratios, future prospects, and risks. Getaka is committed to providing accurate, reliable, and trustworthy information to help readers make informed decisions about their finances and investments.

Disclaimer: This article is for informational purposes only and should not be construed as financial advice. The author is not a SEBI registered financial advisor and does not have any vested interest in Tata Communications Ltd. Investors are advised to conduct their own due diligence and consult with a financial professional before making any investment decisions. The information provided in this article is based on publicly available data and the author's analysis, but it may not be comprehensive or up-to-date. The author and getaka.co.in are not responsible for any errors or omissions in the content. This article is not intended to promote any particular investment strategy or recommendation, and readers should consult with their own financial advisors before making any investment decisions. Data Source: NSE