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E x c e p t i o n a l K P I s ; n e a r t e rm p o l i c y o v e r h a n g…
Idea’s Q3FY12 results were better than our estimates. The company
reported a topline of | 5030.8 crore against our expectation of | 4853.5
crore, posting growth of 8.9% QoQ and 27.2% YoY. While the traffic on
the network grew 7.3% sequentially, the ARPM grew by 1.4% to 43 paisa.
The subscriber base grew 6.2% QoQ to 106.4 million. EBITDA stood at |
1344.6 crore (I-direct estimate: | 1267.2 crore), growing 13.3% QoQ and
41.8% YoY. The EBITDA margin increased 104 bps QoQ to 26.7%,
primarily due to higher operational efficiency on account of seasonality.
PAT for the quarter stood at | 201.0 crore growing 90.0% QoQ albeit on a
comparatively lower base.
Highlights of the quarter
The ARPU for the quarter grew by 2.6% to | 159. MoU per user stood at
369 minutes, growing 1.4% from 364 minutes in Q2FY12 signalling a
seasonally strong quarter after a weak Q2FY12. ARPM rose by 1.4% from
42.7 paisa in Q2FY12 to 43.3 paisa in Q3FY12 as the effect of the recent
price hike has started showing in the ARPM. The subscriber base grew
6.2% (6.2 million) to 106.4 million subscribers. After decreasing in the last
quarter, total traffic also grew by 7.3% to 114 billion minutes.
V a l u a t i o n
All the KPIs posted an improvement in this quarter representing a strong
season. Though it signals a reduction in the competitive intensity, the
management indicated that the competitive intensity is far from over. The
growth is expected to come from Tier I and Tier II cities. However,
spectrum pricing may remain a policy overhang on the stock in the near
term. Assuming revenue CAGR of 12.6% over FY11E–FY20E and terminal
growth of 3% thereon, we have arrived at a target price of | 80/share for
the core business. We have valued the Indus contribution at | 19/share to
arrive at a target price of | 99/share. We maintain our HOLD rating on the
stock
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
E x c e p t i o n a l K P I s ; n e a r t e rm p o l i c y o v e r h a n g…
Idea’s Q3FY12 results were better than our estimates. The company
reported a topline of | 5030.8 crore against our expectation of | 4853.5
crore, posting growth of 8.9% QoQ and 27.2% YoY. While the traffic on
the network grew 7.3% sequentially, the ARPM grew by 1.4% to 43 paisa.
The subscriber base grew 6.2% QoQ to 106.4 million. EBITDA stood at |
1344.6 crore (I-direct estimate: | 1267.2 crore), growing 13.3% QoQ and
41.8% YoY. The EBITDA margin increased 104 bps QoQ to 26.7%,
primarily due to higher operational efficiency on account of seasonality.
PAT for the quarter stood at | 201.0 crore growing 90.0% QoQ albeit on a
comparatively lower base.
Highlights of the quarter
The ARPU for the quarter grew by 2.6% to | 159. MoU per user stood at
369 minutes, growing 1.4% from 364 minutes in Q2FY12 signalling a
seasonally strong quarter after a weak Q2FY12. ARPM rose by 1.4% from
42.7 paisa in Q2FY12 to 43.3 paisa in Q3FY12 as the effect of the recent
price hike has started showing in the ARPM. The subscriber base grew
6.2% (6.2 million) to 106.4 million subscribers. After decreasing in the last
quarter, total traffic also grew by 7.3% to 114 billion minutes.
V a l u a t i o n
All the KPIs posted an improvement in this quarter representing a strong
season. Though it signals a reduction in the competitive intensity, the
management indicated that the competitive intensity is far from over. The
growth is expected to come from Tier I and Tier II cities. However,
spectrum pricing may remain a policy overhang on the stock in the near
term. Assuming revenue CAGR of 12.6% over FY11E–FY20E and terminal
growth of 3% thereon, we have arrived at a target price of | 80/share for
the core business. We have valued the Indus contribution at | 19/share to
arrive at a target price of | 99/share. We maintain our HOLD rating on the
stock
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