X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2019 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Global tele: Bottomline disappoints yet again - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Global tele: Bottomline disappoints yet again

Oct 28, 2002

GTL, the network engineering and IT services company, has announced disappointing bottomline figures for its September quarter. For 2QFY03, it has reported a seqeuential 35% fall in consolidated net profits. The consolidated topline has grown by a marginal 4%, on a QoQ basis. Not accounting for the other income and extraordinary item figures net profits have still declined by 16%. Fall in other income and jump in extraordinary items have further depressed net profits. Revenues from its network engineering business have grown by 12% in 2QFY03. Overseas focus has led to a considerable growth in Global Tele's revenues from the network engineering business. GTL's call centre operations have registered a 10% growth in the same period. The company's call centre business has customers across verticals like banking, insurance and telecom. Revenues from this business have been growing consistently as more and more multinationals are outsourcing their call centre operations to India due to its low cost proposition. However, on a comparative basis the growth in call centre revenues is rather disappointing as other players like Mphasis have reported 56% QoQ growth in its call centre revenues on a similar base.

(Rs m) 1QFY03 2QFY03 Change 1HFY02 2HFY03 Change
Net Sales 1,460 1,517 3.8% 2,695 2977 10.5%
Other Income 48 10 -78.3% 322 58 -82.1%
Expenditure 1,008 1,082 7.4% 1,986 2090 5.2%
Operating Profit (EBDIT) 453 435 -4.0% 709 888 25.2%
Operating Profit Margin (%) 31.0% 28.7%   26.3% 29.8%  
Interest - -   -  
Depreciation 253 262 3.6% 453 515 13.8%
Profit before Tax 247 183 -26.1% 579 430 -25.6%
Extraordinary items - (18)   - (18)  
Tax 2 6   10 7 -30.0%
Profit after Tax/(Loss) 246 159 -35.2% 569 405 -28.7%
Net profit margin (%) 16.8% 10.5%   21.1% 13.6%  
No. of Shares 70.7 70.7   70.4 70.7  
Diluted Earnings per share* 13.9 9.0   16.2 11.5  
P/E Ratio   8.3     6.5  
(* annualised)            

The performance of entreprise solutions business of GTL has been disappointing. Enterprise solutions business has degrown by 2% in 2QFY03 on a QoQ basis. The company has been losing business in this segment consistently due to the slowdown in spending on networking technologies. Increasingly companies are focusing more on generating better returns on the investments they have already made on information technology.

Operating margins have also taken a hit, falling by 230 basis points. A 26% and 30% QoQ jump in employee and selling and distribution (S&D) costs has led to this fall in operating margins. Net profits of the company have been affected further due to lower other income and higher extraordinary expenses (Rs 18 m). An appreciating rupee has been the main reason for fall in other income.

At the current market price of Rs 75, the stock is trading at a P/E multiple of 8x its annualised 2QFY03 earnings. Going forward the growth drivers of the company will be its network engineering division and its call centre business. Global Tele on account of being an early entrant in to the call centre business is likely to maintain healthy growth rates in this business. On the other hand performance of its network engineering division will depend largely on the fortunes of the telecom sector. The stock is unlikely to witness any major activity in the short term as investors may choose to put their money in other technology stocks that have shown better performance in the current quarter.

Consolidated revenues (Rs m) 1QFY03 % of total 2QFY03 % of total QoQ Change
Network engineering 388 27% 436 29% 12%
Customer management solutions 243 17% 267 18% 10%
Enterprise solutions 829 57% 812 54% -2%
Total 1460   1515   4%


Equitymaster requests your view! Post a comment on "Global tele: Bottomline disappoints yet again". Click here!

  

More Views on News

GTL LTD Announces Quarterly Results (3QFY19); Net Profit Down 419.1% (Quarterly Result Update)

Feb 4, 2019 | Updated on Feb 4, 2019

For the quarter ended December 2018, GTL LTD has posted a net profit of Rs 308 m (down 419.1% YoY). Sales on the other hand came in at Rs 561 m (down 76.5% YoY). Read on for a complete analysis of GTL LTD's quarterly results.

GTL LTD Announces Quarterly Results (2QFY19); Net Profit Up 88.3% (Quarterly Result Update)

Nov 5, 2018 | Updated on Nov 5, 2018

For the quarter ended September 2018, GTL LTD has posted a net profit of Rs 582 m (up 88.3% YoY). Sales on the other hand came in at Rs 543 m (down 82.4% YoY). Read on for a complete analysis of GTL LTD's quarterly results.

Newgen Software Technologies Ltd. (IPO)

Jan 15, 2018

Should you subscribe to the IPO of Newgen Software Ltd?

Ankit Shah's First Five Insider Recommendations (The 5 Minute Wrapup)

Aug 5, 2017

How to get exclusive insider recommendations from Ankit Shah.

More Views on News

Most Popular

This is Why the Stock of Jubilant FoodWorks Went Up 1,160%(The 5 Minute Wrapup)

Apr 12, 2019

This critical business strategy has enabled companies to scale their operations faster.

Pocketing Massive Gains with HDFC And HDFC Bank(Profit Hunter)

Apr 12, 2019

Here's how one could have generated gains of Rs 59,250 in 10 days by trading HDFC and HDFC Bank with a capital of Rs 4 lakh.

A Simple 3-Point Investing Manifesto for You the Indian Investor(The 5 Minute Wrapup)

Apr 11, 2019

A must have checklist for every investor in the Indian stock market.

My Master Series on How to Trade Election 2019(Profit Hunter)

Apr 16, 2019

For 30 years he has watched how elections impact the markets, and practiced how to profit from it. Now he is here...telling you everything. Read on...

Election Series: Follow the World's Biggest Traders To See Where the Money Flows(The 5 Minute Wrapup)

Apr 17, 2019

20% of all the traders bring in 80% of the money. Watch these 20% and you get a working idea of which way the wind is blowing.

More

Get the Indian Stock Market's
Most Profitable Ideas

How To Beat Sensex Guide 2019
Get our special report, How to Beat Sensex Nearly 3X Now!
We will never sell or rent your email id.
Please read our Terms

GTL LTD SHARE PRICE


Apr 24, 2019 (Close)

TRACK GTL LTD

  • Track your investment in GTL LTD with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

GTL LTD - IBM COMPARISON

COMPARE GTL LTD WITH

MARKET STATS