Idea Cellular Q4FY11 Result Update; Beat estimates, Upgrade to HOLD;Emkay

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Idea Cellular Q4FY11 Result Update; Beat estimates, Upgrade to HOLD; Target: Rs 72

n    Strong revenue growth of 7.1% qoq to Rs42.3bn v/s our estimate of Rs41.7bn. Higher other operating rev. & flat network opex qoq aided healthy EBITDA margin at 25.4%

n    EBIDTA at Rs10.7bn (our est. 9.9bn) and Q4FY11 PAT at Rs2.7bn (our est. Rs2.5bn). On-off reversal in network opex was to the tune of Rs380mn v/s 150mn in Q3FY11

n    Robust 8.7% rise in traffic on network. ARPU declined to Rs161 v/s Rs 168 in Q3FY11. MOUs declined marginally to 397 v/s 401, while ARPM was down 2.9% qoq

n    Valuations at 8.0x & 6.6x EV/EBIDTA for FY12E & FY13E respectively. Upgrade to HOLD from SELL rating with revised target Rs72 (earlier Rs60)