Emkay Research: Accumulate Rating On GTL With Target Of Rs 269

GTL LimitedEmkay Research report on GTL:

GTL reported the net sales for quarter grew by 78% yoy to Rs 4.1 billion, EBIDTA raised by 107% yoy to Rs 606 million, PAT decreased by 7% yoy to 321 million; APAT grew by 129% yoy to Rs 408 million. EBIDTA margins gains by 206bps yoy to 14.9%. GTL made an agreement with France Telecom to sell off its enterprise solutions and managed services business in all cash deal valued at USD 40 million.

Business sell off includes the transfer of customer base of business along with the relationships with the technology providers such as Alcatel, Lucent, Nortel, Juniper, Verint, etc. along with 590 employees.

Company plans to divert its BPO business and expects an additional cash inflow of USD 60 million from the sale. Price target for GTL from Rs 192 to Rs 269 is based on SOTP approach.

GTL reported Q1FY08 results with 78% rise in the sales to Rs 4.1 billion. EBITDA for Q improved by 107% to Rs 606 million. EBITDA margins raised by 206bps yoy to 14.9% on account of decreased cost of delivery and SG&A. PAT for the quarter decreased by 7% yoy to 321 million. APAT for quarter grew by 129% yoy to Rs 408 million.