EFY Times  
Saturday, August 01, 2015

 
GO
 
 
Fitch Revises Shyam Telecom's Outlook To Negative
 
Home >> Infotech >> Trends                                                                                PRESS RELEASE
 
Fitch Revises Shyam Telecom's Outlook To Negative  
 
   
Rate this news:  (0 Votes)
Tuesday, June 26, 2012 Fitch Ratings has revised India-based Shyam Telecom Limited's (STL) Outlook to Negative from Stable while affirming its National Long-Term rating at 'Fitch BBB-(ind)'. A list of additional rating actions is provided at the end of this commentary.






The Outlook revision reflects Fitch's expectation of an adverse and indirect impact on STL's business of the recent cancellation of telecom licenses of Sistema Shyam TeleServices Limited (SSTL, an associate company of STL) in 21 telecom circles (all except Rajasthan circle). STL's financial performance is tied to SSTL's operational performance; hence, any operational setback to the SSTL could lead to a negative impact on STL's financial performance. In FY12 (year end March), STL generated 89% of its revenue and 84% operating profits by selling code division multiple access (CDMA) mobile devices to SSTL's subscribers through a dealer network. In case, SSTL fails to win back most of these cancelled licenses, STL's revenue and profit will fall down significantly. However, some comfort is drawn from STL's established dealer network, which can be leveraged to quickly launch new products in the market.

The ratings factor in the company's strong financial performance in FY12. Revenue increased 17.6% yoy to INR7,966m and EBITDA margins to 1.4% (FY11: 0.7%). Net financial leverage (adjusted net debt to EBITDA) improved to 1.1x (2.7x) and EBITDA net interest coverage to 5.4x (2.4x). Fitch also notes that the company has low working capital requirements, mainly because of the long credit period offered by its suppliers. The ratings also factors in STL's comfortable liquidity position, as reflected by the moderate utilisation of its working capital facilities and continued support from founders through interest bearing unsecured loans.

The ratings are, however, constrained by STL's low margins, its presence in a highly competitive Indian mobile handset market, and the overcrowded nature of the local handset trading business. The latter can lead to margin erosion or lower-than-expected sales.

Negative rating guidelines include a significant scaling down of SSTL's operations affecting STL's profitability and/or deterioration of the latter's net financial leverage above 4.0x on a sustained basis. Conversely, the Outlook will be revised back to Stable on continuation of SSTL's operations at a reasonable scale or successful implementation of an alternate business strategy by STL to reduce risk emanating from its complete dependence on SSTL leading to net financial leverage below 4.0x on a sustained basis.

Incorporated in 1992, STL has changed its product mix several times in past years, which included radio frequency (RF) equipment and other telecom equipment. It derives most of its revenue from the trading of CDMA devices for SSTL and the rest from manufacturing RF products for domestic and export purposes.

Rating actions on STL's debt instruments are as follows:

- INR40m fund-based working capital limits: affirmed at 'Fitch BBB-(ind)'

- INR1.55bn non-fund based working capital limits: affirmed at 'Fitch BBB-(ind)'/'Fitch A3(ind)'



Print Email Post Comment 
(Total Views: 885)
 
Share

 
 
Infotech News
   
To Windows 10, With Love; New Twitter App
Introducing A Lamp Which Runs On Salt
PremiumAV Assures The Security Of Windows 10 With PremiumAV And PremiumAV IS 2016
Riverbed SteelHead Extends Optimization For More Cloud Apps And Ensures Secure And Cost Efficient App Delivery Over Hybrid WANs
Pacific Cloud Services Launches The Managed Private Cloud Solution
 
 
 
     
     
     
     
     
     
Most popular
 

Daily

PremiumAV Assures The Security Of Windows 10 With PremiumAV And PremiumAV IS 2016
Riverbed SteelHead Extends Optimization For More Cloud Apps And Ensures Secure And Cost Efficient App Delivery Over Hybrid WANs
InsideView Secures USD 32.5 Million In New Funding To Invest In Three Hot Product Areas: Marketing Products, APIs, And Its Big Data Platform
Accellera Systems Initiative Delivers UVM 1.2 To IEEE For Standardization
IEEE Extends Standard To Enable Multicast Group Management For Media Independent Handover Services
Research And Markets: Smart Grid Equipment Market In South Korea 2015-2019 With ABB, GE Energy, IBM, POSCO ICT & Siemens Energy
Harwin Simplifies Miniature EMC Screening
American Express And Best Buy Team Up To Enable Card Members To Use Membership Rewards Points On BestBuy.com
This Autumn, Ola And Myntra Will Give You A Makeover With One Touch On The Ola App
New ESD Suppressor Series From Littelfuse Protects Sensitive Electronics From Damaging Discharges Up To 30kV
 
   

Weekly

In Fond Memory Of The Blue-Chip Scientist; Dr A.P.J. Abdul Kalam
IBM To Release 50 Projects To The Open Source Community
GNU Founder Blesses Crowd Supply, A Hardware-Focused Crowdfunding Site
Five Things You Will Love About Windows 10!
Google Releases Kubernetes 1.0, Upgrades Its Open Source Container Deployment And Management Tool
Cancer Is Painful, But Its Detection Can Now Be Painless
Technology and Education:
Top Five Free CSS Editors For Linux
Yahoo To Bring Back Its Flickr Service
Five Pointless Yet Awesome Linux Tricks
Turtle Beach Corporation Announces New $15 Million Term Loan And Amendment Of Existing Subordinated Debt
Claws Mail 3.12 Open-Source Email
Microsoft To Launch Lumia 950 And Lumia 950 XL Soon
Samsung Surrenders To Apple
Linus Torvalds Unveils Linux Kernels 4.2 With Major Fixes
Airtel Launches 4G Services In Four More Cities
 
   

Overall

Features
Top Five Free CSS Editors For Linux
A good editor is all that programmer needs for web development!...
Five Pointless Yet Awesome Linux Tricks
Never thought command terminal will be entertaining? Try these 5 commands!...
Five Apps To Help You Relax
You can enjoy the sweet relief using these productivity apps!...
Seven Little-Known Facts About Bill Gates
The great philanthropist and Microsoft founder, Bill Gates has an interesting personality....
Five Things You Will Love About Windows 10!
Windows 10 launches on July 29, here are 5 things you will love about this desktop OS....
6 Programmers Working Hard To Revolutionise Technology
In today's tech dominant world, software developers have become celebrities and role models!...
7 Tricks Every Android User Must Know!
You can enjoy the new level of productivity and efficiency by following some simple tips of Android....
9 Cool Features On Google You Didn't Know About
For all those who didn't know about it, Google Art Project allows indivduals to view artifacts from more than 600 international gallaries, present acr...
Top Four New iPhone Apps
Download these apps on your iPhone or iPad and make your life easier....
Top 5 Project Management Certifications
Everything in IT can be considered as a project. The role of a project manager is a very responsible one, for any IT-related project ...
5 Tips About HTML5 That Can Change Your Life
Internet has come a long way with HTML5. The evolution of HTML has added a rich browsing experience to HTML....
Top 10 Useful Tools For Designers And Developers
Tools and apps have long been an important part of designing and development....
5 Gmail Features You May Not Have Heard Of!
Google's email service packs many hidden features....
Top 5 Upcoming Tech Product Launches
Here are 5 exciting new tech products that will launch before the end of the year...
Six Organisations That Secretly Run The Internet!
Find out who is behind the giant wheel of the internet!...
 
  View All
Dialogue
 
“We Offer Managed Document Solutions To CIO And IT Decision Makers”: Canon
Manufacturing within the country will surely reduce the cost of our devices, but manufacturing can begin only if there is the desired eco-system and w...
“One Day The End User Can Open Up A Used Battery, And Use What’s Inside As Barbecue Sauce”
Of course that is not something currently possible, but what B&B Batteries does have are some secret recipes for their very specialised battery design...
We Wish To Procure All The LED Components Within India: Avni Energy
G. Gururaja, director, Avni Energy Solutions Pvt Ltd, shares his views about the expanding LED industry in the Indian market and the company's plans i...
We Have Registered 50 Per Cent Growth In The Last Two Years: Arihant Lighting
Apart from LEDs, Arihant is associated with the promotion of renewable energy in India and therefore, manufactures various energy saving products....
“Elcom Plans To Build A New State Of The Art R&D And Manufacturing Unit In Maharashtra", Reveals MD Girish V Vaze
Starting out as a small business to cater to the industry’s need for import substitutes, Elcom International has grown to be a leader in the field of ...
   
  View All
Videos
 
First Look: LG Optimus G
The phone sports a high-end display and comes powered by a powerful processor. ...
Create QR-Codes For Free
TEC-IT releases the freeware QR-Code Studio to provide a quick and convenient way of QR code creation for every application scenario....
DoT Secretary Shares Plans For Growth Of Telecom Sector
M.F. Farooqui has recently taken charge as secretary, Department of Telecom....
Hands-On: Sony Xperia Z
Xperia Z is Sony's first entrant model in the big-screen smartphone category. ...
Hands On: Videocon A30 Smartphone
Videocon, the consumer electronics company which is known for its refrigerators, washing machine and air-conditioner has unveiled its Android-based sm...
   
View All
   
 
IFA 2014
 
IFA 2014: LG Launches 34-Inches Curved Monitor
The company is yet to confirm price and availability of the device....
IFA 2014: Intel Launches First Core M Range Of Processors
This range of processors is tailor-made for 2-in-1 devices which include a tablet and a laptop....
MWC 2014: Tablet Lets People Feel Textures On Its Screen
Now feel what you see on your tablet, by way of ultrasonic waves....
MWC 2014: 4K Android Tablet Games To Kill Consoles, iPad
Tablet makers like Samsung want to beat the iPad by making 4K tabs. ...
MWC 2014: This Vodafone Backpack Helps Get Network In Disaster Situations
Two engineers of Vodafone New Zealand displayed the "mini" mobile network by Vodafone substructure in a backpack. ...
MWC 2014: Wilocity Chipset To Bring 'Lightening' Speed To Mobile Phones
Wilocity has developed a WiGig chipset for mobile phones that will bring lightning-fast wireless capability ...
MWC 2014: Samsung Introduces Octacore, Hexacore Chipsets
The Korean giant, Samsung unveiled two new octacore and hexacore chipsets at MWC 2014, in Barcelona. The company previously used Exynos 5 Octa 5410 ch...
   
View All
   
 
Events
 
19th Consumer Electronic Imaging Fair To Be Held On ...

View All
   
   
 
 

home archives contact us advertise with us
           
Magazines Portals Directories Events News Verticals Educational Institute  
Electronics for You
Open Source for You
Electronics Bazaar
electronicsforu.com
efytimes.com
opensourceforu.com
electronicsb2b.com
Electronics Annual Guide
EFY EXPO INDIA
EFY EXPO WEST
ELECTRONICS ROCKS
EFY Awards
OSIDAYS Expo
Electronics
Infotech
Linux & Open Source
Consumer Electronics
Science & Technology
BPO
EFY Techcenter

Educational Kits
Kitsnspares.com  
 
 
© Copyright 2015 EFY Enterprises Pvt. Ltd.
All rights reserved. Reproduction in whole or in part in any form or medium without written permission is prohibited.
Usage of the content from the web site is subject to Terms and Conditions