| Fundamental Reports INDIA | 4 February 2016 |
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?? November 2015 | ||
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ARPU and subscriber adds miss estimates
For detailed report Click here
Outlook and valuation: We have lowered our FY16/17 ARPU estimate to Rs 172/177 from Rs 175/182 to factor in lower-than-expected ARPU growth in DAS phase-3 and 4 markets. Correspondingly, we reduce our FY16/17 EBITDA estimates by 1%/7%. We rollover our target price to FY18 and maintain Buy. DCF-based PT at Rs 115 (from Rs 127 earlier) û we believe that Dish operating and financial performance will improve with underlying structural changes in the industry, revival of pricing power, and moderating content-cost inflation. At our target, the stock will trade at 13x/11x FY16/17 EV/EBITDA.
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BUY (Maintain) CMP RS 77 TARGET RS 115 (+49%)
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Tata Communications (TCOM IN) Data business gathering pace
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Outlook and valuation: We have cut our estimates taking into account lower revenues from Neotel. However, this change does not have an impact on our target price and valuation, as Neotel is likely to be divested û and the sale price is already known. We maintain our Buy recommendation with a revised target price of Rs 475 (earlier Rs 490)
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BUY (Maintain) CMP RS 379 TARGET RS 475 (+25%)
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Cummins India (KKC IN) Domestic performance shadowed by exports weakness
For detailed report Click here
Outlook and valuation We are enthused by Cummins above-industry growth in the domestic market and more so by its power-gen business, which reflects on-ground recovery in capacity creation. However, the export outlook remains weak in the light of a weak global environment. We lower our export growth expectation to 7% for FY17 (from 20%), which is still higher than the management guidance of 0-5%. We introduce FY18 estimates and rollover our multiple to September 2017 EPS and value Cummins at 30x to arrive at our target price of Rs 1050 (unchanged). Current valuations of 26x September 2017 P/E remain expensive for a stock that we expect to deliver 14% CAGR in FY16-18. Hence, we maintain our Neutral rating.
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Neutral (Maintain) CMP RS 897 TARGET RS 1050 (+17%)
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