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We at Jobaaj have reported about small caps registering massive gains over small time periods, such as Hindustan Motors, Integra Essentia & Eki Energy. This time it's the communications arm of the Tata Group, Tata Teleservices.
Tata Teleservices (Maharashtra) Limited (TTML) is a leading player in the connectivity & communication solutions market serving enterprise customers. Its services range from connectivity, collaboration, cloud, security, IoT & marketing solutions. The company partners with Small & Medium Businesses (SMBs) and offers a broad portfolio of Information and Communication Technology services for businesses in India under the brand name Tata Tele Business Services (TTBS).
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Earliest records of the company date back to October 2000, when TTML'S stock closed at a price of Rs 10.12 per share. The stock moved above Rs 20 briefly but was priced below Rs 10 per share for the majority from 2000-2020.
In January 2020, the stock was priced at Rs 2.25 per share. However, in October 2020, the stock suddenly began surging as its price jumped from Rs 2.75 to Rs 8 per share (+191%) in less than 3 months.
The stock kept surging upwards as it began jumping circuits for several consecutive trading sessions. TTML touched its lifetime high of Rs 290.15 per share in January 2022!! However, the stock declined shortly thereafter. On 16th Sep 2022, the stock closed at Rs 118.25 per share, down over 3%.
An investment of Rs 2,750 in October 2020 would have yielded Rs 1,18,250 in September 2022, a gain of 4,200% in 2 years!!!!
There are several factors driving the scrip. The company signed a contract with Renesas Electronics for collaboration in the fields of automotive electronics and telecom networks. Moreover, Tata Group has been infusing funds into the company whenever needed. Furthermore, FIIs have been building their stakes in the company, from 0.01% in September 2021 to 2.4% in June 2022!
The company, however, is not making any profits. For the quarter that ended in June 2022, the company had a total income of Rs 269.08 crores against expenses of Rs 564.18 crores, resulting in a loss of Rs 295.10 crores for the quarter.
Despite the net loss, TTML's losses have been reducing over the years as the June 2022 quarter yielded a 7.3% YoY contraction in losses. The company had a positive EBITDA of Rs 119.61 crores. The biggest expense of the company was Financing costs, accounting for 67% of total costs.
However, investors are suggested to exercise caution. The company has been making significant losses for several years. Even though its losses are declining, so are its revenues. It would be logical to wait for the company's fundamentals to improve before investing in it.
Article by Aman Agarwal.
This news piece is brought to you in association with jobaaj.com
