MTNL soars 60% + inside a month to Rs 16 levels from under par Rs 10 in August ! ~ What is ringing ?

MTNL has soared 60%+ inside a month to Rs 16 levels from under par Rs 10 in August ~ What’s ringing ?

The trigger was the Government announcing that they would be returning Spectrum fees of @ Rs 5700 crs to MTNL as also approving Rs 570 crs annually as pension payment ~ subject to cabinet approval

MTNL has been struggling for years with Employee costs higher than Revenues~FY 13 showed Revenues at Rs 3496 crs and Employee Costs at Rs 4904 crs !~ It’s yet got just under 40000 employees ~ It’s debt was Rs 11542 crs as on March 31,2013 and Interest for FY 13 consequently was high at Rs 1181 crs

The last Four years have been threatening ~ It began huge losses from FY 10 when it borrowed to pay the Spectrum fees ~ Rs 2610 crs was the loss in that year and four years later in FY 13 the loss has more than doubled to Rs 5322 crs wiping of the Networth which at March 31,2013 turned  and stood negative at Rs 2788 crs  ~ Equity is Rs 630 crs of FV Rs 10 with the government holding 56%

Auditors Report carries multiple qualifications although the Accounts have been prepared a s a agoing concern

Government hopes MTNL will now move back on the road to profits and MTNL itself hopes to return to the black by 2017-18

It was no wonder the Share price had dropped below par last month to it’s all time low of Rs 9.71 !~ It now has surged to @ Rs 16 with a Market Cap of @ Rs 1000 crs and very good volumes of Rs 27 lakhs shares on BSE on Friday

Glorious days were in the abnormal  2000 Year when the Share Price was Rs 390~ in 2008 the Share Price had a high at  Rs 200 levels~ since then it has been dropping

Can the Share Price regain some colour in the next three years ? Can it become a multibagger ! ? ~ it’s been a MultiDestroyer for sure ! ~ I  have been amused at some experts recommending this share in the past few years  while it kept dropping to new lows ~ they lived on while MTNL nearly died ! ~have not seen any fresh recommendations !

MTNL has tried with little or no success to bring down Employee Strength ~ it needs to significantly succeed here to be really a reckoner in the highly competitive Telecom Sector

Prepared a detailed note on the freely accessible Scrip Watch Module on our company website ~ have a look here

Straining MTNL gets a Sigh of Relief on Revival Plans ~ 13-Sep-2013

For years now I’m a subscriber of MTNL Broadband at my Residence as well as one of my offices and am quite happy with it ~ the pricing is competitive,the service is quick and I have not really experienced any serious network breakdown

Any Takers for MTNL at Rs 16 ! ?

Cheers !