Tata Teleservices (Maharashtra) (532371) Q4 18/19 earnings summary

Executive summary

• FY19 revenue fell sharply amid intense price competition and subscriber losses, while cost reductions lifted EBITDA; net loss narrowed substantially YoY, partly reflecting exceptional items.

• Consumer mobile business transfer to Bharti Airtel reached a late approval stage; the remaining focus is enterprise and wireline services, with potential restructuring of residual operations.

Financial highlights

• Total revenue was Rs. 1,315.58 crore vs Rs. 1,904.00 crore in FY18; revenue from operations was Rs. 1,277.20 crore vs Rs. 1,868.51 crore.

• EBITDA rose to Rs. 707.76 crore from Rs. 170.42 crore; loss before exceptional items narrowed to Rs. 998.71 crore from Rs. 1,900.32 crore.

• Net loss was Rs. 667.60 crore vs Rs. 9,841.99 crore; exceptional items were a net expense of Rs. 331.11 crore, including a Rs. 529.35 crore partial impairment reversal and Rs. 198.24 crore restructuring cost.

• Finance cost remained high at Rs. 1,559.10 crore vs Rs. 1,568.97 crore; operating expenses declined to Rs. 607.82 crore from Rs. 1,733.58 crore.

Outlook and guidance

• Consumer mobile demerger to Bharti Airtel was expected to complete soon following regulatory and tribunal steps; consideration was intended primarily to reduce residual debt and financial obligations.

• Enterprise telecom services were expected to grow on fiber reach, established customer relationships, customized solutions and channel partners; sustaining growth without significant incremental investment may be difficult.

• Potential strategic restructuring of residual business lines remains under consideration; no quantified financial guidance was stated.