1 st June, 2016 TABLE 1 MARKET DATA (STANDALONE) (As on 31 st May, 2016) NSE Code TTML NSE Market Price ( ) 6.45 NSE Market Cap. ( Cr.) 1,253.11 Sector Telecomm Service Face Value ( ) 10.00 Equity ( Cr.) 1,954.93 52 week High/Low ( ) 9.40/5.70 Net worth ( Cr.) 2,968.08 Business Group Tata TTM P/E N.A. Traded Volume (Shares) 31,125 Year of Incorporation 1995 TTM P/BV N.A. Traded Volume (lacs) 2.01 Corporate Office: Voltas Premises, TB Kadam Marg Chinchpokli, Mumbai 400033, Maharashtra Company Website: TABLE 2 PRICE PERFORMANCE Source Capitaline COMPANY BACKGROUND Tata Teleservices (Maharashtra) Limited provides basic and cellular telecommunication services in Maharashtra and Goa, India. It offers wireline services, code division multiple access services, global system for mobile communications services, and 3G services; and voice, data, and other enterprise services to retail, large corporate, and small and medium enterprises. The company also provides high speed Internet access services; and connectivity and managed, verticals based mobile application, and cloud services. It provides its products and services to approximately 11.1 million wireline and wireless subscribers under the TATA DOCOMO brand name through a network of approximately 14,000 base transceiver stations and 14,000 kilometers of optical fiber transmission network. The company was incorporated in 1995 and is based in Navi Mumbai, India. 31 st May, 2016 29 th May, 2015 30 th May, 2014 % Change 2016 vs 2015 2015 vs 2014 CAGR for 2 years Price ( ) 6.41 7.07 11.04 9.34% 35.96% 23.80% Trading Volume (Shares) (yearly avg.) 4,00,301 7,97,048 7,60,447 49.78% 4.81% NSE Market Cap. (in Cr.) 1,253.11 1,382.14 2,158.24 9.34% 35.96% 23.80% Source Money Control, price figures are adjusted to corporate action of stock split/bonus issue/stock merger The Company in the Month of August, 2013 has issued Bonus shares in the proportion of 2 (two) new equity shares of 10/ each for every existing 15 (fifteen) equity share(s) held by the Members of the Company to the exception of promoters/promoter group. 1 P AGE
TABLE 3 FINANCIALS ( Cr.) 2015 2014 2013 % Change CAGR for 2 years 2015 vs 2014 2014 vs 2013 Net Worth 2,968.08 2,352.83 1,792.75 N.A. N.A. N.A. Current Assets 478.11 545.75 998.47 12.39% 45.34% 30.80% Non Current Assets 5,561.6 5,115.27 5,021.91 8.73% 1.86% 5.24% Total Assets 6,039.71 5,661.02 6,020.38 6.69% 5.97% 0.16% Investments 1,425.21 703.59 563.63 102.56% 24.83% 59.02% Finance Cost 650.78 565.05 564.35 15.17% 0.12% 7.38% Long Term Liabilities 5,026.25 4,740.64 4,969.01 6.02% 4.60% 0.57% Current Liabilities 3,981.54 3,273.21 2,844.12 21.64% 15.09% 18.32% Turnover 2,892.73 2,731.18 2,634.54 5.92% 3.67% 4.79% Profit After Tax (PAT, Cr.) 615.25 560.08 658.77 N.A. N.A. N.A. EPS ( ) 3.00 3.00 3.00 N.A. N.A. N.A. Source Money Control/Annual Report Discussion as per Company: During the financial year 2014 15, the Company reported total income at 2,939 Crore as compared to 2,819 Crore in the previous year representing a growth of about 4%. Net loss during the year was 615 Crore. The accumulated losses of the Company at the end of the financial year have exceeded its paid up equity capital and reserves. During the financial year 2013 14, the Company reported total revenue of 2,819 Crores compared to 2,686 Crores the previous year. The accumulated losses of the Company at the end of the financial year have exceeded its paid up equity capital and reserves. During the financial year 2012 13, the Company registered an income growth of 7% at 2,685.55 Crores, compared to 2,507.47 Crores in the previous year. Operating expenses increased by 7% mainly due to an increase in interconnect cost and network operation cost. 2 P AGE
AUDIT QUALIFICATIONS Audit Qualifications in last 3 years: Emphasis of Matter for the year 2013 Attention is invited to note no. 25.II. (i) (c), regarding setting aside of the Order of the Telecom Disputes Settlement & Appellant Tribunal (TDSAT) regarding computation of License fees (LF) by the Hon'ble Supreme Court of India (SC). The TDSAT Order stated that income from sale of securities is not related to the licensed activity and that bad debts written off, waivers and discounts are actual monies lost by service providers and hence should be deducted from Adjusted Gross Revenue (AGR) while computing the LF. The Company, has considered Rs. 154.86 crores, being the LF on profit on sale of investment and bad debts written off during the earlier year, as contingent liability and has also made payment of the same to Department of Telecommunications (DOT) under protest. Prior to the aforesaid judgment, the Company had received provisional assessment orders from DOT, against which applications have now been filed with the TDSAT in line with the aforesaid judgment. Our opinion is not qualified in respect of this matter. Frequency of Qualifications Have the auditors made any adverse remark in last 3 years? Response No Comment Not Applicable Are the material accounts audited by the Principal Auditors? Yes Do the financial statements include material unaudited financial statements? No TABLE 4: BOARD PROFILE (As on 31st March, 2015) Regulatory Norms Company % of Independent Directors on the Board 33% 57.14% % of Promoter Directors on the Board 0% Number of Women Directors on the Board Atleast 1 1 Classification of Chairman of the Board Non Executive Director Is the post of Chairman and MD/CEO held by the same person? No Average attendance of Directors in the Board meetings (%) 86.49% Source Money Control/Annual Report Composition of Board: As per Regulation 17(i)(b) of the Listing Regulations, 2015, the Company should have at least 33% Independent Directors as the Chairman of the Board is a Non Executive Director. The Company as on 31 st March, 2015 has 57.14% of Independent Directors and hence, it meets the regulatory requirements. Board Diversity: The Company has 7 directors out of which 6 are male and 1 is female. 3 P AGE
TABLE 5 FINANCIAL RATIOS Ratios 2015 2014 2013 Turnover Ratios Return Ratios Liquidity Ratios Solvency Ratios Trading Ratios % Change 2015 vs 2014 2014 vs 2013 Inventory Turnover 232.91 615.13 825.87 62.14% 25.52% Debtors Turnover 15.28 10.82 8.85 41.18% 22.31% Fixed asset Turnover 0.52 0.53 0.52 2.58% 1.78% Current Asset Turnover 6.05 5.00 2.64 20.90% 89.66% Operating Profit Margin 21.27% 20.51% 25.01% N.A. N.A. Net Profit Margin 21.27% 20.51% 25.01% N.A. N.A. Return on Assets (ROA) 10.19% 9.89% 10.94% N.A. N.A. Return on Equity (ROE) N.A. N.A. N.A. N.A. N.A. Return on Capital Employed (ROCE) 0.41% 0.06% N.A. 562.87% N.A. Current Ratio 0.12 0.17 0.35 27.98% 52.51% Quick Ratio 0.12 0.17 0.35 29.27% 52.74% Cash Ratio 0.07 0.09 0.25 21.37% 64.00% Working Capital Turnover ratio N.A. N.A. N.A. N.A. N.A. Debt to equity ratio N.A. N.A. N.A. N.A. N.A. Interest Coverage Ratio 0.05 0.01 N.A. 520.71% N.A. Market Cap / Sales 0.46 0.48 0.50 5.58% 3.54% Market Cap/ Net Worth N.A. N.A. N.A. N.A. N.A. Market Cap/PAT N.A. N.A. N.A. N.A. N.A. Market Cap/EBITDA 344.42 591.92 543.58 41.81% 8.89% Trading Volume (shares) (avg. of 1 year) 1,352,242 3,211,540 1,692,743 57.89% 89.72% Trading Volume (shares) (high in 1 year) 16,975,324 28,434,972 19,622,822 40.30% 44.91% Trading Volume (shares) (low in 1 year) 259,130 454,681 133,891 43.01% 239.59% Ratio High/low trading volume 65.51 62.54 146.56 4.75% 57.33% Ratio High/average trading volume 12.55 8.85 11.59 41.78% 23.62% Source Money Control 4 P AGE
TABLE 6 (A): OWNERSHIP & MANAGEMENT RISKS Mar' 2016 Mar' 2015 Mar' 2014 Comments Shareholding Promoter shareholding 74.90% 74.90% 74.90% Public Institutional shareholding 0.68% 0.88% 0.70% Public Others shareholding 24.42% 24.22% 24.40% Non Promoter Non Public 0.00% 0.00% 0.00% Shareholding TABLE 6 (B): OWNERSHIP & MANAGEMENT RISKS Market Activity of Promoters No No new equity shares were issued during the period from Mar' 2014 to Mar' 2016. There was no major change was observed in the shareholding pattern during the said period. The promoters have pledged 34.71% of their shareholding. Preferential issue to promoters Preferential issue to others GDRs issued by the Company Issue of ESOPs/Issue of shares other than Preferential allotment Source Annual Report No No The Company did not issue and GDRs during last three years The Company does not have any ESOP Scheme. 5 P AGE
Equity: The equity shares capital of the Company Glossary Net Worth: The amount by which the Assets exceeds the liabilities excluding shareholders funds of the Company Turnover: The revenue earned from the operations of the Company EPS: Earning Per Share is net profit earned by the Company per share Profit After Tax Number of outstanding shares P/E ratio: It is the ratio of the Company s share price to earnings per share of the Company / Price of each share Earnings per share Current Assets: Cash and other assets that are expected to be converted to cash in one year Fixed Assets: assets which are purchased for long term use and are not likely to be converted quickly into cash, such as land, buildings, and equipment Total Assets: Current Assets + Fixed Assets Investments: An investment is an asset or item that is purchased with the hope that it will generate income or appreciate in the future. Finance Cost: The Financing Cost (FC), also known as the Cost of Finances (COF), is the cost and interest and other charges incurred during the year in relation to borrowed money. Long Term Liabilities: Long term liabilities are liabilities with a maturity period of over one year. Current Liabilities: A company's debts or obligations that are due within one year. Inventory Turnover ratio: Inventory Turnover is a ratio showing how many times a company's inventory is sold and replaced over a period. Inventory Debtors Turnover: Accounts receivable turnover is an efficiency ratio or activity ratio that measures how many times a business can turn its accounts receivable into cash during a period Accounts recievables Fixed Asset Turnover: The fixed asset turnover ratio is a financial ratio of net sales to fixed assets Fixed Assets Current Asset Turnover: The current asset turnover ratio is a financial ratio of net sales to fixed assets Current Assets 6 P AGE
Operating Profit Margin: Operating margin is a measurement of what proportion of a Company s revenue is left over after paying for variable costs of production such as wages, raw materials etc. It can be calculated by dividing a Company s operating income (also known as operating profit ) during a given period by its sales during the same period. Operating profit Net Profit Margin: Net profit margin is the percentage of revenue left after all expenses have been deducted from sales Net profit Return on Assets: ROA tells you what earnings were generated from invested capital (assets) Net profit Total Assets Return on equity/net worth: return on equity (ROE) is the amount of net income returned as a percentage of shareholders equity. Net profit Net worth Return on Capital Employed: Return on capital employed (ROCE) is a financial ratio that measures a company's profitability and the efficiency with which its capital is employed. Net profit Total Debt Equity share capital Current ratio: The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts over the next 12 months. It compares a firm's current assets to its current liabilities. Current Assets Current Liabilities Quick ratio: The quick ratio is a measure of how well a Company can meet its short term financial liabilities. Current Assets Inventories Current Liabilities Cash ratio: The ratio of the liquid assets of a Company to its current liabilities. Current Assets Inventories Account Recievables Current Liabilities Working Capital Turnover ratio: The working capital turnover ratio is also referred to as net sales to working capital. It indicates a Company's effectiveness in using its working capital. Current Assets Current Liabilities Debt to Equity ratio: The debt to equity ratio (D/E) is a financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets. Interest Coverage ratio: The Interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a Company can pay interest on outstanding debt. 7 P AGE
Market Cap/Sales ratio: Market Cap/sales ratio, Price sales ratio, P/S ratio, or PSR, is a valuation metric for stocks. It is calculated by dividing the company's market cap by the revenue in the most recent year; or, equivalently, divide the per share stock price by the per share revenue. / Market Cap/ Net Worth ratio: It is a valuation ratio calculated by dividing Company s market cap to net worth. / Market Cap/ PAT ratio: It is a valuation ratio calculated by dividing Company s market cap to net profit. / Market Cap/ EBITDA ratio: It is a valuation ratio calculated by dividing Company s market cap to EBITDA. / Trading Volume (shares) (avg. of 1 year): Average number of shares/day traded in 1 year Trading volume (shares) (high in 1 year): Highest number of shares/day traded in 1 year Trading volume (shares) (minimum in 1 year): Lowest number of shares traded on any one day in 1 year 8 P AGE
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