Motilal Oswal: Tata Communications’ Sharp Data Margin Improvement Drives Ebitda Growth
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Motilal Oswal Report
Tata Communications Ltd.’s Q2 FY21 revenues were flat (in-line) despite the expectation of increasing data usage due to work from home.
Ebitda jumped 11% QoQ (12% beat), led by sharp data margin improvement, which can be partly attributed to cost cutting initiatives and some portion to one-time Covid-19 cost benefit.
We have increased our FY21/FY22E Ebitda estimates by 9%/10% due to better-than-expected Ebitda, driven by the cost initiatives.
We have built in 23% Ebitda compound annual growth rate over FY20-22E with 106% growth for H2 FY21.
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