Jan 19, 2007

MTNL awaits a windfall from prime property

The real estate bug has bitten Mahanagar Telephone Nigam (MTNL) too. The public sector telecom company is in talks with builders to develop commercial properties on the large tracts of land it owns in prime locations across Mumbai, Delhi and the National Capital Region (NCR).

The first tender for developing a commercial centre on MTNL’s land in Noida, near Delhi, could be out anytime now.

This piece of land spread over 50 acres near the National Highway 24 could fetch around Rs 900 crore for the company. This is almost 10% of MTNL’s market cap, which was Rs 10,162 crore on January 18. MTNL shares were marginally down at Rs 161.30 on Thursday

MTNL is in the process of preparing the tender to develop the property near NH-24. Besides, it is also identifying surplus land in other places,” sources

With dwindling earnings, the PSU is forced to generate revenues from other sources as its core telecom business remains restricted to Delhi and Mumbai. MTNL’s net profit dipped 25% to Rs 121 crore in the second quarter of this fiscal, while total income decreased from Rs 1,444.05 crore to Rs 1,376.76 crore. Sources said MTNL will not sell any surplus real estate.

With dwindling earnings, the PSU is forced to generate revenues from other sources as its core telecom business remains restricted to Delhi and Mumbai. MTNL’s net profit dipped 25% to Rs 121 crore in the second quarter of this fiscal, while total income decreased from Rs 1,444.05 crore to Rs 1,376.76 crore. Sources said MTNL will not sell any surplus real estate.

BUY MTNL --- TARGET --- 200 + ( 6 MONTHS HOLD )

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