Broker's take: Nomura reiterates 'buy' call on Singtel

NOMURA Research reiterated its "buy" call on Singapore Telecommunications (Singtel) following the release of the company's fiscal third-quarter results, which showed growth and improvement across many segments. It is also keeping its target price of S$4.30 for the stock.

By noon time on Thursday, Singtel's share price was up 0.24 per cent at S$4.15.

Analyst Sachin Gupta noted that the key positive in its report card for Q3, which ended on Dec 31, 2014, was the turnaround in the Australian wireless business, which reported a 4 per cent service revenue growth year-on-year, the second consecutive quarter of growth after many quarters of declines. This was driven by an increase in average revenue per user (Arpu) and subscription growth.

Singtel's Singapore business showed "mixed trends" - revenue growth was up 10 per cent year-on-year, while Ebitda (earnings before interest, tax, depreciation and amortisation) was down 5 per cent due to higher cost of sales and selling costs stemming from the impact of seasonality and new devices.

But Singtel's associate earnings have found some stability - up 4 per cent quarter-on-quarter and 24 per cent year-on-year, mainly driven by Telkomsel and Advanced Info Service (AIS).

Meanwhile, OCBC Investment Research is placing its "buy" rating for Singtel and fair value of S$4.18 under review pending an analyst teleconference later.