We believe that the shift in revenue mix towards IP VPN will drive revenue growth and positively
impact margins. At INR 283, the stock trades at 8.8x FY07E and 4.7x FY08E, and EV/
EBITDA of 7x FY07E and 3.6x FY08E. We believe that current valuations are extremely
attractive in light of the exponential growth expected over the next two years and hold significant
upside potential. We believe that Tulip could be a potential acquisition target by larger integrated telecom players given swift traction in IP VPN operations and a likely free cash flow positive status by FY08E. We initiate coverage with a ‘BUY’ recommendation
impact margins. At INR 283, the stock trades at 8.8x FY07E and 4.7x FY08E, and EV/
EBITDA of 7x FY07E and 3.6x FY08E. We believe that current valuations are extremely
attractive in light of the exponential growth expected over the next two years and hold significant
upside potential. We believe that Tulip could be a potential acquisition target by larger integrated telecom players given swift traction in IP VPN operations and a likely free cash flow positive status by FY08E. We initiate coverage with a ‘BUY’ recommendation
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