EFY Times  
Monday, March 30, 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: 825)
 
Share

 
 
Infotech News
   
Virtusa Wins Adobe Marketing Cloud Innovation Award For 2015
Introducing SalezShark - The "Relationship Cloud" For Your Business
10 Best Wire-Framing Tools For UX Designers
7 Simple Solutions To Daily Tech Problems
8 Must-Have Tools For IT Manager
 
 
 
     
     
     
Most popular
 

Daily

Weekly

Microsoft Partners With Android Manufacturers
TDC Announces Partnership With NIDA - Australia’s National Institute Of Dramatic Art
FedDev Ontario Supports Global Growth Of Wysdom Software Platform For Mobile Devices
Samsung Health And Medical Equipment Sponsors Heart Across America Cycling Tour Kicking Off March 22
Cloud-Based 3D Printing OS Launched By 3DPrinterOS
New Live Or On-Demand Online Courses Develop Human Resources And Technology Skills For Leaders In Business Of Law
Canonical Partners With Ericsson For NFV Telecoms
GreenPeak Launches Smart PIR Sensor For Smart Home Applications
Trend Micro: Hack May Have Cost Sony $100 Million!
Amazon Launches Unlimited Cloud Storage Service
TRAI May Regulate Skype, Viber, WhatsApp And Other Apps
Updated Versions Of Google Maps Now Available!
Mozilla Releases Updated Version Of Firefox
Asus Zenfone 2 To Arrive In India Soon!
Moto G (Second Gen) Available At Rs. 10,999 Exclusively On Flipkart
Samsung Galaxy S6, Galaxy S6 Edge Launched In India!
 
   

Overall

Features
10 Best Wire-Framing Tools For UX Designers
Here is the list of top 10 wireframing tools to help designers...
7 Simple Solutions To Daily Tech Problems
Here we round up some common tech hurdles and their simple solutions...
8 Must-Have Tools For IT Manager
As technology has changed, the job of an IT manager has grown even more complex. Here are 8 tools that can help IT managers in working more effectivel...
5 Biggest Information Security Threats
Cyber security has been top concern for tech companies and organisations. Here are 5 biggest security threats for next two years!...
7 Easy To Operate Code Checking Tools
These 7 online tools for code testing are helpful to developers looking to track unidentified and incomplete codes on the Internet...
9 Creative Perks Offered By tech Companies
Here are nine of the most enticing perks tech companies are offering their employees...
7 Rules All Programmers Should Live By
Here is a set of rules that we think all software developers should live by. These rules are more of a guidelines...
4 Websites To Get Free Stuff
Now you don't need to pay for furnishing your home or your kid's closet...
6 Must Have Tools For Java Professionals
Here is the list of tools for Java developers that are proven to get the job done efficiently....
8 Coolest Cloud Programming Langauges
If you are looking to master in programming languages, here are eight great options among cloud computing world....
7 Tips To Mitigate Data Breaches
Here are seven tips you can follow to avoid data breaches in your organisation!...
Top 8 Python Frameworks For Web Developers
Working with a web framework helps you jump-start your web application. Here are eight best Python Frameworks for web developers....
Best Alternatives To Google Code For Programmers
Google is shutting down Google Code, their hosting service for open source projects and coding initiatives. Here are a few alternatives that can get y...
Top 8 Best PHP Tools For Analysing And Parsing Code
Here are some of the best PHP Tools that will help programmers to analyse and parse their programming code....
8 Open Source Tools For Windows
Here are top eight free open source tools by Microsoft....
 
  View All
Dialogue
 
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....
"Littelfuse Is Growing At Around 20-25 Per Cent In India And Expect That To Continue", Predicts VP Deepak Nayar
On the electronics side, Littelfuse has registered an 8-10 per cent growth, year on year....
10 Questions That Google Never Asks While Hiring!
Here is a list of 10 questions that Google just banned from their interviews....
   
  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