Emkay Securities maintained a `BUY` rating on GTL with a reduced price target of Rs 334 as against current market price of Rs 213 (July 11).

GTL`s Q1FY09 results were below the broking house`s estimates. The net sales for the quarter remained flat with mere 3% y-o-y growth to Rs 4,189 million.

The EBIDTA grew by 7% y-o-y to Rs 651 million where as the EBIDTA margins expanded by 60bps to 15.5%. The PAT for the quarter increased by 2% yoy to Rs 328 million, significantly lower than Emkay`s estimate of Rs 423 million.

In the same quarter last year, the revenues included Rs 308 million from the enterprise solutions business which the company exited by selling it to France Telecom. Adjusting to that the revenues grew by 11.3% y-o-y, EBIDTA grew by 15% y-o-y, and the PAT grew by 2%. The lower revenue growth during the quarter is on account of project delays in domestic business where as, the international revenues continued to maintain the growth momentum. The management has however maintained the revenue growth guidance of 25% for FY09.

Post lower than expected Q1FY09 results, the broking house has lowered its revenue and earning estimates by 5% and 9% respectively for FY09E and FY10E. The revised earning estimates are Rs 19.5 and Rs 25.7 for FY09E and FY10E respectively.

The broking house has also reduced the value of investments in GIL from Rs 120 a share to Rs 77 a share owing to higher discount to the stock price. The stock with a revised price target of Rs 334 from Rs 401.