Tata Teleservices (Maharashtra) (532371) Q4 16/17 earnings summary

Executive summary

• FY17 revenue and EBITDA fell amid aggressive discounting after a new 4G entrant launched; spectrum amortization and impairment drove a much larger reported loss.

• Net loss was Rs. 2,356.47 crore, including Rs. 958.82 crore of exceptional items; negative equity and lender covenant breaches heightened financing and going-concern risks.

Financial highlights

• Total revenue was Rs. 2,761.38 crore vs Rs. 2,999.08 crore in FY16; telecom service revenue was Rs. 2,657.42 crore vs Rs. 2,915.12 crore.

• EBITDA was Rs. 712.65 crore vs Rs. 815.78 crore; finance costs rose to Rs. 1,282.27 crore from Rs. 683.63 crore.

• Loss before exceptional items and tax was Rs. 1,397.65 crore vs Rs. 358.34 crore; exceptional items were Rs. 958.82 crore and reported net loss Rs. 2,356.47 crore.

• Adjusted for the Rs. 905.41 crore spectrum impairment, the remaining exceptional-item amount included a Rs. 53.41 crore reassessment of excess ADC paid to BSNL/MTNL.

Outlook and guidance

• Long-term data and other services opportunities remain attractive, but near-term competition and network/spectrum investment gaps create a difficult operating environment; no numerical outlook was stated.

• Strategy prioritizes enterprise, wireline and broadband growth, asset utilization, customer retention, product innovation and cost optimization; non-voice, IoT and M2M offerings are intended as future growth drivers.