Telecom stock engaged in providing Telecommunication solutions to Telecom Network Operators jumped 4 percent in the day’s trade upon entering into a revenue-sharing agreement with Bharat Sanchar Nigam Limited (BSNL).
Price Action
With a market capitalization of Rs. 719 Crores, the shares of Sar Televenture Limited were trading at Rs. 239.75 per equity share, down 3 percent from its previous day’s close price of Rs. 248.40.
What Happened
Sar Televenture Limited has entered into a revenue-sharing agreement with Bharat Sanchar Nigam Limited (BSNL) to deliver BSNL telecom services, including fixed, wireless, broadband, and many other services to end users at Mohali, Punjab.
The project encompasses constructing, expanding, and maintaining the Optical Fiber Cables (OFC) network within residential and commercial complexes, as well as establishing interconnections between buildings using Optical Fiber Cables. It also includes the installation and upkeep of overhead OFC backhaul from the nearest BSNL pickup point to the Optical Line Terminal (OLT) location.
Further, It covers establishing interconnectivity at the network operation center and offering maintenance support for the existing telecom infrastructure and other installed telecom equipment as needed on a case-by-case.
As per the agreement, both BSNL and SAR Televenture Limited will have a revenue-sharing of 51 percent and 49 respectively for Urban Areas and 50 percent each for rural areas for 10 years which is renewable thereafter on similar /mutually agreed terms.
Fund Raising
In Addition, recently the Board of Directors of Sar Televenture Limited has approved raising funds of upto Rs. 300 Crores through a rights issue of 1:1 and raising an additional Rs. 150 Crores by way of further public offer (FPO) of the equity shares of the company at a price band of Rs. 200 to Rs. 210 per equity share.
About the company
Sar Televenture Limited is a provider of telecommunication solutions to Telecom Network Operators, engaged in the installation and commissioning of 4G and 5G Towers, Optical Fibre Cable (OFC) Systems, and dealing in network equipment.
Sar Televenture Limited already has installed 373 4G/5G Towers which are leased onward to Airtel. Given the expected LOIs from telecom giants like AIRTEL, Vodafone, Jio, etc. the company is planning to install another 6000+ 5G/4G Towers in the next 2 years.
Financials and Ratios
Its revenue from operations grew by 282 percent from Rs. 32 Crores in FY23 to Rs. 124 Crores in FY24, accompanied by profits of Rs. 4 Crores to Rs. 16 Crores.
In terms of Return ratios, it has reported a return on equity (ROE) of 133 percent, and a return on capital employed (ROCE) of 80.8 percent. It has reported a debt-to-equity ratio of 2.48.
Written by: Bharath K.S
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