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After couple of good quarters on the back of good traction from its GSM services, now the
performance of Tata Teleservices Maharashtra (TTML) has come to standstill. It reported 8%
sequential drop in revenue to Rs 560.09 crore mainly due to lower subsidy from Department of
Telecommunication (DoT) for Universal service obligation (just Rs 6.83 crore against Rs 54.46
crore in sequential quarter). Excluding that, the revenue was flat at Rs 552.21 against Rs 553.30
crore in sequential quarter. The company added just 0.9 million subscribers during Q1 FY11 (1.5
million in Q4 FY10 and 1.9 million in Q3 FY11) with total subscriber base reaching to 13.9 million
subscribers.

The OPM dropped 370 bps to 20.5% on the back of higher network operation cost (150 bps),
staff cost (100 bps) and administrative cost (190 bps). The impact on OPM could have been
more severe as the company has made a provision of Rs 165 crore for contingencies towards
the claims/litigations against the company relating to DoT and other regulators. We have
considered that as EO otherwise there would have been loss of Rs 50 crore at operating level.

The operating profit stood at Rs 114.94 crore, down 22% Q-o-Q. The other income also declined
from Rs 22.25 crore to Rs 3.12 crore on Q-o-Q. There stood EO gain of Rs 669.93 crore (related
to Rs 834.93 crore profit on sale of long-term investment in its subsidiary 21st Century Infra Tele
and Rs 165 crore aforesaid one-off provision), which resulted in net profit of Rs 557.88 crore
against Rs 64.33 crore net loss in sequential quarter.


 
  
     
 
 

After couple of good quarters on the back of good traction from its GSM services - TATA
DoCoMo, now the performance of the company has come to a standstill. It reported 8%
sequential drop in revenue to Rs 560.09 crore mainly due to lower subsidy from Department of
Telecommunication (DoT) for Universal service obligation (just Rs 6.83 crore against Rs 54.46
crore in sequential quarter). Excluding that, the revenue was flat at Rs 552.21 against Rs 553.30
crore in sequential quarter. The OPM dropped 370 bps to 20.5% on the back of higher network
operation cost (150 bps), staff cost (100 bps) and administrative cost (190 bps). The impact on
OPM could have been more severe as the company has made a provision of Rs 165 crore for
contingencies towards the outwards claims/litigations against the company relating to DoT and
other regulators. We have considered that as EO otherwise there would have been loss of Rs 50
crore at operating level.

The operating profit stood at Rs 114.94 crore, down 22% Q-o-Q. The other income also declined
from Rs 22.25 crore to Rs 3.12 crore on Q-o-Q. There stood EO gain of Rs 669.93 crore (related
to Rs 834.93 crore profit on sale of long-term investment in its subsidiary 21st Century Infra Tele
and Rs 165 crore aforesaid one-off provision), which resulted in net profit of Rs 557.88 crore
against Rs 64.33 crore net loss in sequential quarter,


 
  
     
  

For the year ended March 2010, the revenue was up by 8% Y-o-Y at Rs 2213.54 crore. The
OPM for the year, however, dipped by 720 bps to 21.5% due to pressure on margins and higher
expenses during the year (specifically in Q2 FY10) due to launch of GSM services. As a
combined result, operating profit stood 19% lower Y-o-Y at Rs 476.24 crore.

With higher interest cost (16% higher at Rs 313.14 crore) (excluding foreign exchange fluctuation
loss), 12% higher depreciation charges at Rs 520.89 crore and after considering EO income of
Rs 35.56 crore against Nil in FY09, the net loss stood at Rs 298.01 crore, 75% higher Y-o-Y.

    


As of 30th June 2010, promoters hold 77.72% shares (same as at the end of sequential quarter),
foreign investors hold 1.54% (1.46% at end of sequential quarter), MFs, Banks and other
institutions hold 0.62% (0.8% at end of sequential quarter), and others hold 20.11% (20.02% at
end of sequential quarter). The promoters have pledged 49.33 crore shares as on 30th June 2010
(33.45% of promoters holding and 26% of total share capital of the company), same as on
31st March 2010.

The shares of the company are currently trading at around Rs 23 (LTP on 29th July 2010) at
BSE.

Tata Teleservices (Maharashtra): Consolidated Results

  
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