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http://content.icicidirect.com/mailimages/ICICIdirect_RelianceCommunication_Q3FY12.pdf
S u b d u e d t r a f f i c g r o w t h …
Reliance Communication reported its Q3FY12 numbers, which were
below our expectations on the topline front. Revenues for the quarter
stood at | 4824.1 crore against our expectation of | 5066.1 crore primarily
on account of lower than expected growth in traffic, growing 0.7% QoQ.
The EBITDA for the quarter stood at | 1383.1 crore against our
expectation of | 1483.5 crore, growing 1.9% QoQ. The EBITDA margin for
the quarter stood at 28.7% expanding by 35 bps QoQ. However, on the
bottomline front, the company reported better than expected numbers.
Net profit for the quarter stood at | 186.2 crore against our expectation of
| 165.3 crore primarily due to higher other income, which stood at | 228
crore against our expectation of | 100 crore.
Highlights of quarter
The traffic on the network grew marginally by 1.0% QoQ to 99.9 billion
minutes while the ARPM remained stable at 45 paisa. ARPU and MoU,
however, continued with their declining trend, falling from | 101 and 227
minutes to | 100 and 224 minutes, respectively. Subscriber net adds
continued to decline with the company adding 3.0 million wireless
subscribers in this quarter. Data revenues contributed to over 20% of the
total revenues.
V a l u a t i o n
The quarter was marked by subdued growth in traffic suggesting price
elasticity among subscribers. In the wake of higher interest cost in the
future as guided by the management, we have revised our estimates for
FY13 from | 4.0 to | 3.8. At the CMP of | 94, the stock is trading at 26.5x
FY12E EPS of | 3.5 and 24.9x FY13E EPS of | 3.8. We have valued the
stock using the DCF methodology and arrived at a target price of | 84,
assuming 4.7% CAGR in revenue over FY11E-FY20E and terminal growth
rate of 3%. Due to the recent rally in the stock, we rate it as SELL.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://content.icicidirect.com/mailimages/ICICIdirect_RelianceCommunication_Q3FY12.pdf
S u b d u e d t r a f f i c g r o w t h …
Reliance Communication reported its Q3FY12 numbers, which were
below our expectations on the topline front. Revenues for the quarter
stood at | 4824.1 crore against our expectation of | 5066.1 crore primarily
on account of lower than expected growth in traffic, growing 0.7% QoQ.
The EBITDA for the quarter stood at | 1383.1 crore against our
expectation of | 1483.5 crore, growing 1.9% QoQ. The EBITDA margin for
the quarter stood at 28.7% expanding by 35 bps QoQ. However, on the
bottomline front, the company reported better than expected numbers.
Net profit for the quarter stood at | 186.2 crore against our expectation of
| 165.3 crore primarily due to higher other income, which stood at | 228
crore against our expectation of | 100 crore.
Highlights of quarter
The traffic on the network grew marginally by 1.0% QoQ to 99.9 billion
minutes while the ARPM remained stable at 45 paisa. ARPU and MoU,
however, continued with their declining trend, falling from | 101 and 227
minutes to | 100 and 224 minutes, respectively. Subscriber net adds
continued to decline with the company adding 3.0 million wireless
subscribers in this quarter. Data revenues contributed to over 20% of the
total revenues.
V a l u a t i o n
The quarter was marked by subdued growth in traffic suggesting price
elasticity among subscribers. In the wake of higher interest cost in the
future as guided by the management, we have revised our estimates for
FY13 from | 4.0 to | 3.8. At the CMP of | 94, the stock is trading at 26.5x
FY12E EPS of | 3.5 and 24.9x FY13E EPS of | 3.8. We have valued the
stock using the DCF methodology and arrived at a target price of | 84,
assuming 4.7% CAGR in revenue over FY11E-FY20E and terminal growth
rate of 3%. Due to the recent rally in the stock, we rate it as SELL.
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