MTNL surges on tax refunds

Mahanagar Telecom Nigam Limited, the low price stock continues to gain on an intraday basis. The shares on July 4 have surged over 4 per cent. The shares in the last 3 months have given a return of more than 35 per cent.
The shares have rallied on the news that the company has received Income Tax refund for the assessment Year 2000-01 amounting to Rs. 112.95 crores which includes Rs. 52.35 crores towards interest on refund. This refund will certainly ease the pressure on the income statement of the firm. The company in Q4FY16 had posted profits for the first time.

Company had posted a net profit of Rs 174.58 crore after surrendering 800 MHz of CDMA spectrum for Rs 428.95 crore in March 2016. MTNL has seen a continuous streak of losses since Q1 FY15. In the preceding quarter, MTNL had reported a loss of Rs 704.93 crore and a loss of Rs 595.11 crore in the same quarter last year. Previously, MTNL had announced that it is looking to expand its basic or fixed services network in partnership with private players on a revenue share basis model.

With the latest tax refund, the company’s vision to become operationally profitable by 2016-17 and completely profitable by 2017-18 looks somewhat possible. Mahanagar Telephone Nigam Limited(MTNL) is a Government of India undertaking, with business interest in telecommunication services. Their services include PSTN, I-NET, ISP, ISDN, IN, WLL (GARUDA), cellular mobile services (Dolphin), leased line, broad band, Wi-Fi services, virtual phone and phone mail service.