Indian ADRs to Buy, Sell
Tata Communications (TataCom) is a provider of wholesale international voice services and leverages its solution capabilities across the global and pan India network to deliver managed solutions.
During the recent quarters, revenues jumped 8% on the back of growth in the international and national long distance calling segments. However, relentless pressure on pricing coupled with moderate volume growth plunged operating profits 18% year-over-year during the first half of fiscal 2010-11.
Overall, operating margins narrowed 350 basis points (bps) during the first six months of the year to 9.5%. Interest costs inched up 6% as total debt rose to $1.75 billion, as compared to $1.66 billion a year ago. Overall, net loss more than doubled to $112 million during this period.
The stress on wholesale voice business is expected to drive the company into losses for 2011 and 2012, similar to 2010. However, positive triggers like the sale of land bank and Tata Teleservices could offer some support.
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