1 / 11

Reliance Communication Ltd.,

Reliance Communication Ltd.,. We recommend Buy with a price target of 800-920-1100. Buying level :650-700. Resistance : 730-780. The scrip has strongly supported at 61.8% fibonocci levels at 650 and is taking a sideways movement and witnessing good volume at the bottom.

quasar
Download Presentation

Reliance Communication Ltd.,

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Reliance Communication Ltd., We recommend Buy with a price target of 800-920-1100. Buying level :650-700. Resistance : 730-780. The scrip has strongly supported at 61.8% fibonocci levels at 650 and is taking a sideways movement and witnessing good volume at the bottom. we witness a strong accumulation at these levels and will be a good investment at these levels.

  2. Company Outlook Earnings  Growth   • Reliance  Communications  (RCOM)  recorded  a  32.8%  y‐o‐y  and  a  9.7%  q‐o‐q  topline  growth  in  Q1  FY2008.  Mainly  driven  by  the  Wireless  Business  unit;  company  also  seems  to  be  positive  and  thus  has  made  84%  of  the  investment  in  the  segment.      • The  Company  has  posted  a  profit  after  tax  of  Rs  837.30  crore  for  the  quarter  ended  June  30,  2007  as  compared  to  Rs  474.17  crore  for  the  quarter  ended  June  30,  2006.  Total  Income  has  increased  from  Rs  2732.16  crore  for  the  quarter  ended  June  30,  2006  to  Rs  3229.69  crore  for  the  quarter  ended  June  30,  2007.  

  3. Valuation Summary The  consolidated  figures  of  profit  tax  after  are  Rs  1220.84  crore  for  the  quarter  ended  June  30,  2007  as  compared  to  Rs  512.82  crore  for  the  quarter  ended  June  30,  2006.  Total  Income  has  increased  from  Rs  3250.12  crore  for  the  quarter  ended  June  30,  2006  to  Rs  4303.70  crore  for  the  quarter  ended  June  30,  2007.  KLG  Systel  received  orders  worth  Rs  670  mn  from  the  Governments  of  Rajasthan  and  Haryana.   In  broadband  segment  the  number  of  access  lines  increased  to  705,000  in  Q1  FY2008  (322,000  in  corresponding  previous  quarter)  and  the  number  of  buildings  directly  connected  to  the  Reliance  network  increased  to  600,000.  Reliance  Communications  has  a  market  share  of  over  50%  of  new  business  acquisitions  in  the  enterprise  connectivity  space.  

  4. Valuation Summary • The  Average  Revenue  Per  User  (ARPU)  remains  stable  at  Rs.  375  as  against  a  continuous  fall  across  the  industry.  The  revenue  per  minute  had  improved  from  Rs.  0.70  per  minute  in  the  previous  quarter  to  Rs.  0.74  per  minute  in  the  current  quarter.  The  company  expects  the  ARPU  to  come  down  marginally  due  to  subscriber’s  growth.   • RCOM  added  its  highest‐ever  monthly  subscriber  additions,  at  over  1.48mn  adding  5.5m  subscribers  during  the  quarter.  The  company  remains  the  second‐largest  wireless  operator  in  the  country,  with  a  total  market  share  of  17.6%.  The  company  expects  the  growth  rate  to  increase  to  1.8  million  subscribers  per  month.   • The  current  Rupee  appreciation  has  benefited  the  company  as  it  has  imported  equipments  from  China  and  the  Chinese  Yuan  is  beingpegged  to  US  Dollar.  

  5. INDUSTRY  OVERVIEW   • India’s  telephone  network  is  one  of  the  largest  communication  networks  in  the  World  which  will  continue  to  grow  at  blistering  pce.  The  Indian  telecommunications  network  with  over  200  million  connections  is  the  third  largest  in  the  world  after  China  and  USA,  and  second  largest  among  the  emerging  economies  of  Asia.  With  a  growth  rate  of  45%,  Indian  telecom  industry  has  the  highest  growth  rate  in  the  world.   • The  telecom  sector  is  driving  today  the  growth  of  both  incomes  and  employment.  Indeed,  this  growth  is  creating  new  business  and  new  employment  opportunities.  India  has  emerged  as  a  major  base  for  the  telecom  industry  worldwide.  

  6. FUTURE  PLANS  OF  THE  COMPANY The  company  expects  dilution  of  the  shares  of  FLAG  telecom  in  FY08  and  further  listing  it  on  the  stock  exchange  from  around  18  onths  from  now.  The  Dilution  will  allow  the  company  to  gain  more  funds  and  thus  creation  of  value  unlocking.  The  funds  will  helpful  for  the  company  for  further  expansion.  The  listing  of  shares  will  give  its  strategic  investors  an  option  to  exit  and  further  brand  building  and  value  unlocking  for  te  company.   Currently  the  company  has  85%  of  the  domestic  network  coverage  with  CDMA  network  presence  in  21  circles  out  of  23  circles  and  GSM  network  presence  in  8  circes.  The  company  is  expanding  its  GSM  network  rigorously  and  is  spending  huge  on  capex  expansion  and  setting  up  of  new  towers.  Company  is  targeting  to  expand  its  GSM  network  to  all  23  circles  across  the  country.  The  company  expects  a  year  around  to  launch  its  GSM  services  in  the  remaining  15  circles  across  India.

  7. Disclaimer: This report has been prepared solely for information purposes and the information contained herein may not be deemed to be an investment advice. Such information is impersonal and not tailored to the investment needs of any specific person. The information contained herein is not a complete analysis of every material fact representing any company, industry or security. The views expressed may change. While the information contained herein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Investors are advised to satisfy themselves before making any investments and should consult with and rely upon their own advisors whether and how to use such information in making any investment decision. Neither the author nor his firm accepts any liability arising out of use of the above information/ article. This report is exclusively for the clients of Venkataraman & Co. only. VENKATARAMAN & CO., Stock & Share Brokers, New No.2 (Old No.52) Dr. Ranga Road, Mylapore, Chennai 600 004. Web: www.venkataraman .com E-mail: vnkco@vsnl.com

More Related