GTL INFRASTRUCTURE LTD:-10 valid reasons as to why one should now buy GTL INFRA as risk reward ratio is very favourable. Remember no pain no gain. Buy @ 1.35 on dips as well as rise. Stop loss 0.85 Mr..SUNNY D'SOUZA

GTL INFRA CMP-- 1.35

Management:

Mr. Manoj Tirodkar - Chairman

Mr. N. Balasubramanian - Vice Chairman & Ind. Director

Mr. Milind Naik - Whole Time Director & COO

Mr. Charudatta Naik - Director

Dr. Anand Patkar - Independent Director

Mr. Vinod B. Agarwala - Independent Director

Mr. Vijay M. Vij - Independent Director

Mrs. Sonali P. Choudhary - Director

1. About 19 investors and Private equity firms (Carlyle, Goldman Sachs) have shown interest in taking over GTL infrastructure.

2. Canadian fund Brookfield and India’s Piramal enterprises & Rel Jio have also shown interest to buy stake in GTL.

3. The Company is seeking a valuation of Rs.15,000 Cr and planned to sell a stake of 51% by FY 18 (And even expected to sell stake more than 76%)

4. The Price at this valuations comes to Rs.12 (the current market price is Rs.1.50 which has almost 90% Margins of safety with the estimated valuations)

5. GTL and CNIL (Chennai Network Infrastructure) have merged and  has contributed revenue around Rs.2600 Cr and EBITDA is expected going forward.

6. The Company has a debt Rs.4900 Cr which is now reduced by another 2400 crs as Edelweiss ARC has taken it. So now Rs 2500 crs. Chk Link https://www.thehindubusinessline.com/markets/oriental-bank-invites-i-bankers-to-sell-shares-acquired-through-sdr/article24584649.ece

Oriental Bank invites i-bankers to sell shares acquired through SDR Bank holds significant stake in a few firms, including Ballarpur Ind, GTL Infra www.thehindubusinessline.com

.

7. The Company has also received almost 35 + awards for innovation excellence, infrastructure brands, environment excellence.

8. Promoter Holding is at 20.07% and public are holding only 79.93% ending 30Th June 2018.

9. The Company is ISO 9001:2008 certified.

10. FCCBs also converted to equity shares – so there is no issue with regards to conversion ( FCCBs are generally very risky instruments)

Opportunities

1. Major players are looking to consolidate and leverage their cost efficiency, some of them are below:

2. Rcom is in progress of merger with Sistema

3. Bharti Airtel acquired spectrum in the 1800 MHz band in six circles in the country from Videocon. It is also in process of acquiring 4G spectrum of Aircel in eight circles

4. Aircel and Rcom are likely to decide on merger of their business

5. Rcom and Rjio have reportedly finalized spectrum – trading agreement   

Cons:

1. Stagnation in 2G Voice subscriber growth 

2. Stringent regulations is a concern

3. The company is incurring losses

Financial Highlights:

1. The Equity base is at Rs.246 Crs.

2. The Company delivered a poor growth -60% over the past 3 years

3. The Company has continuously delivered losses over the last 5 years (but due to turnaround we could expect profits in near future)

4. The Book value is Negative Rs.1.16

Rating:

Technical Rating: 2.

Fundamental Rating: 45.

Overall rating: 60.

Valuations:

Valuations could not be calculated exactly due to uncertainty in revenues but based on the future estimates we could expect the price to reach Rs.25-30-35 within 6-9-12 months time or earlier.

(The valuations are calculated on the basis of financial inputs/estimates but investors are required to invest based on the business potential and business risks too) 

A potential turnaround story without an iota of doubt.

Disclaimer: Equity markets are subject to market risk. Consult your financial handler before investing.