Idea Cellular – Q3FY15 Result Update :: HDFC Securities

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Idea Cellular Limited (“Idea”) is the third largest wireless operator in India with a Revenue Market Share (RMS) of 17.2% (Q2FY15). In the 15 Established Service Areas, its RMS stands at a strong level of 20.4% (Q2FY15). The company carries around 1.86 billion minutes on a daily basis during the quarter Q3FY15. Idea is the sixth largest mobile telecommunications company (counted on operations in a single country) in the world based on number of subscribers (as determined from data issued by GSMA Intelligence, as of June 2014). Given below are some of the key highlights and review of financials & key performance indicators for Idea in Q3FY15.  Mobile revenue increased 5.9% QoQ (up 21.2% YoY) to Rs.8,017.5 Crores while its bottom line expanded 1.5% QoQ to Rs.767.1 Crores in Q3FY15.  Idea reported notable 5.1% QoQ expansion in Minutes on its network, which stood at 170.7 Bn Minutes, during the quarter. Jump in data traffic remained even sharper with 16.9% sequential rise in data on the platform (2G + 3G) to 46.1 Bn MB.  Strong Mobile Data Revenues kept the company’s aggregate Average Revenue per Minute (ARPM), at 46.3p, better than previous quarter levels of 45.9p. As a result, Idea’s Average Revenue per User (ARPU) inched up to Rs.179 per user in Q3FY15 from Rs.176, a growth of 1.7% QoQ.  The strong Cash Profit of Rs. 2028.6 crores in Q3FY15 (YoY Growth of 29.5%) has helped company reduce Net Debt to Rs.11089.1 crores. The Net Debt to Annualised EBITDA ratio now stands at 1.12, lowest in the industry, providing company sufficient head room to participate in the forthcoming license renewalspectrum auction.  Idea has reviewed and reduced the estimated useful life of core network equipments from present 10 to 9 years. Consequently, this quarter the depreciation charge has risen by Rs.2,625 million.

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