Mittal expects the HoldCo discount to narrow to 10% to 15%, supported by projected core operating profit growth of 17% in FY2025 and 6% in FY2026, led by stronger performance at Optus and enterprise unit NCS.
DBS Group Research analyst Sachin Mittal has maintained his “buy” call on Singapore Telecommunications (SGX:Z74
) (Singtel) with a raised target price of $4.27 from $3.93 previously, citing a narrowing HoldCo discount.
Mittal observes that Singtel’s holding company (HoldCo) discount, as indicated by the market, has dropped to 27% from a peak of 53% in November 2023. This is due to stronger core operating profit, rising exposure to data centres that command a high valuation multiple, and the divestments worth $10 billion over the past five years. Part of the proceeds has been reinvested into the group’s ICT businesses.
