Idea Cellular forex loss weighs on bottom-line ACCUMULATE :Emkay

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Idea Cellular

forex loss weighs on bottom-line

ACCUMULATE

CMP: Rs91                                        Target Price: Rs105

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n     Revenue grew 2.2% qoq to Rs46.2bn (in line with our est.), primarily due pronounced seasonally weak quarter

n     Q2FY12 EBIDTA at Rs11.9bn (our est. 12bn), PAT at Rs1.0bn (our est. Rs1.3bn). Higher interest, depreciation charge pertaining to 3G spectrum and forex loss of Rs313mn dented the bottom-line

n     Traffic on network declined 2.2%. ARPU declined to Rs155 v/s Rs 160 in Q1FY12. MOUs declined 7.8% to 364 v/s 391 subsequently ARPM improved 4.1% qoq to Rs0.43

n     Valuations at 7.9x & 6.4x EV/EBIDTA for FY12E & FY13E respectively. We reiterate our positive view on the stock, retain ACCUMULATE with target price of Rs105