EFY Times  
Monday, May 04, 2015

 
GO
 
 

Fitch Revises Shyam Telecom's Outlook To Negative
 
Home >> Infotech >> Trends
 
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: 839)
 
Share

 
 
Infotech News
   
India And Japan Sign Action Agenda For Investment And Trade Promotion
Build 2015 Over; Windows 10 To Release Sooner Than Expected
Google Voice Command Now Supports Third-Party Apps
Android 5.1.1 Lollipop Update Now Available For Nexus 10 And Nexus 7
MAIT & TAIT Organise National Conclave On IT & Electronics Manufacturing In India
 
 
 
     
     
     
     
     
     
Most popular
 

Daily

Weekly

Control4 Brings 4K Ultra HD To The Smart Home With New 4K Media Distribution Solutions
Android 5.1.1 Lollipop Update Now Available For Nexus 10 And Nexus 7
DBAK Expands Cloud Offering, Arrow Relationship With ArrowSphere Marketplace
Control4 Brings 4K Ultra HD To The Smart Home With New 4K Media Distribution Solutions
MapR Integrates Its Hadoop Distribution With Teradata QueryGrid
Infosys Accelerates Data-Driven Innovation For Enterprises Through The Infosys Information Platform
Hackers Take Down TRAI Website Over Net Neutrality Row
Google Voice Command Now Supports Third-Party Apps
Confirmed: Microsoft Makes Windows 10 Compatible With iOS And Android Apps
Ultra-High Definition Video Encoding Now Feasible In Low-Cost FPGAs Or Low-End ASICs
Adobe And Microsoft Partner To Transform Marketing, Sales And Customer Service
Viber Offers Earthquake Victims Free Overseas Calls
20,000 Micromax Canvas Spark Sold In Just 2 Mins
Bye Bye Internet Explorer, Hello Microsoft Edge
Google Responds To Nepal Earthquake; Deploys Person-Finder Tool
Facebook Helps Ease Nepal Worries With Safety Check Feature
LG G4: The Most Ambitious Smartphone Yet
 
   

Overall

InstaLively Raises $120K From Six Angel Investors
   
Updated Panasonic Toughpad 4K Tablet Now Available
   
AMD Embedded R-Series APU Powers Samsung Electronics Digital Signage Systems
   
NoSQL Market Is Expected To Reach $4.2 Billion, Globally, By 2020 - Allied Market Research
   
3 Successes And 3 Failures Of Microsoft
   
Panasonic Enhances Toughpad 4K Tablet For Improved Productivity In Creative, Technical Fields
   
European Union Delegation To Organize Media Seminar #DIGILOGUE2015 On 27 April
   
Enterprises In India Seek Dynamic Marketing Automation Solutions, Finds Frost & Sullivan
   
INSTALIVELY - Mobile LiveStreaming App Which Bridges Youtube Live And Social Media, Raised (120,000$)From Angels
   
Windows Phone To Get Whatsapp Voice Calling Feature Soon!
   
 
   
Features
5 Rules To Ensure Proper Programming Style
Here are some of the best rules that help you in attaining a better programming style....
Key Rules To Build A Great Tech Team
Making IT work in any organisation is about making human connections. Here's how you can do it....
6 Best Code Editors For Realtime Collaboration
Here is the compiled list of 6 Best Code Editors for Real Time Collaboration....
Top 10 Most Expensive Gadgets In The World
Here are top 10 gadgets made for super-rich people in the world...
7 Things To Do After Buying New iPhone
Bought a new iPhone? Here are 7 things you need to do right away...
8 Gadgets To Make Your Smartphone Even Smarter!
Check out these 8 cool gadgets that will make your smartphone smarter...
10 Must Have Google Chrome Apps
Install these Chrome extension apps to boost your work productivity...
Top 6 Octa-Core Android Phones Under Rs 10,000/-
Here is the list of best 6 super-fast Android phones you can buy under Rs 10,000/-...
6 Qualities That Can Help You Achieve Happiness
Here are 6 qualities that you can incorporate in life to find the greater happiness....
Top 10 Frequently Asked SQL Query Interview Questions
Here are 10 frequently asked SQL interview questions and answers that can help you crack the interview....
8 Best Alternatives To Bootstrap
Boostrap is used by many web developers out there. If you are looking for some innovative alternative to Bootstrap. Here is the list of 8 best options...
8 Tech Companies You Didn't Know You Use Everyday!
You may not have heard the names of following tech companies but, you use their product and services in daily life through your favorite app....
Top 8 PHP Libraries For Developers
Here is the list of best PHP libraries for web developers and programmers...
3 Successes And 3 Failures Of Microsoft
Microsoft has seen many triumphs and failures. Here are top 3 successes and 3 failures in company's 40 year journey....
Top 8 Most Expensive Smartphones In India
Ever wondered about the most expensive smartphones available in India? Here is the list of luxury smartphones...
 
  View All
Dialogue
 
“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 ...
Delta Magnets Ltd To Enter Into JV With Chinese Company!
The company had partnered with TDK Japan for technology transfer to manufacture magnets in India....
   
  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