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Idea Cellular Ltd.
F1Q12 Displays Strong
Operating Performance
Quick Comment – Idea reported better-than-
expected F1Q12 results at both the top line and the
EBITDA level, in a relatively stable pricing environment
depicting its high leverage to the wireless segment.
Overall revenue grew 23% YoY and 7% QoQ; while
absolute EBITDA grew 36% YoY and 16% QoQ.
EBITDA margin expanded 202bp QoQ to 26.6% vs. our
expectation of only 20bp improvement. Profit declined
12% YoY and 35% QoQ due to higher amortization fees
and net finance costs.
Overall revenue and EBITDA were 1% and 8% above
our expectations, respectively, due to higher traffic,
coupled with overall reduction in operating expenses.
Profit was 2% below expectations.
Key Positives:
1) Traffic grew 7% QoQ and 32% YoY to 109bn minutes.
The company carried an additional 6.7bn minutes for the
quarter, about 20% lower than F4Q11.
2) ARPMs increased 1%, the first growth in ARPMs in 10
quarters.
3) Margins in the established 11 circles expanded 230bp
to 29.6% vs. our estimate of 27%. Losses in the
remaining new circles maintained at Rs1.4bn in F1Q12.
Key Negatives:
1) Effective tax rate rose from 19.4% during the quarter
to 30%, although the company is still under Minimum
Alternate Tax.
2) The net debt of the company increased to US$2.6bn,
up largely due to an increase in working cycle
requirement.
Capex: Idea spent Rs10.4bn in F1Q12. Management
has guided for Capex of Rs40bn for F2012.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Idea Cellular Ltd.
F1Q12 Displays Strong
Operating Performance
Quick Comment – Idea reported better-than-
expected F1Q12 results at both the top line and the
EBITDA level, in a relatively stable pricing environment
depicting its high leverage to the wireless segment.
Overall revenue grew 23% YoY and 7% QoQ; while
absolute EBITDA grew 36% YoY and 16% QoQ.
EBITDA margin expanded 202bp QoQ to 26.6% vs. our
expectation of only 20bp improvement. Profit declined
12% YoY and 35% QoQ due to higher amortization fees
and net finance costs.
Overall revenue and EBITDA were 1% and 8% above
our expectations, respectively, due to higher traffic,
coupled with overall reduction in operating expenses.
Profit was 2% below expectations.
Key Positives:
1) Traffic grew 7% QoQ and 32% YoY to 109bn minutes.
The company carried an additional 6.7bn minutes for the
quarter, about 20% lower than F4Q11.
2) ARPMs increased 1%, the first growth in ARPMs in 10
quarters.
3) Margins in the established 11 circles expanded 230bp
to 29.6% vs. our estimate of 27%. Losses in the
remaining new circles maintained at Rs1.4bn in F1Q12.
Key Negatives:
1) Effective tax rate rose from 19.4% during the quarter
to 30%, although the company is still under Minimum
Alternate Tax.
2) The net debt of the company increased to US$2.6bn,
up largely due to an increase in working cycle
requirement.
Capex: Idea spent Rs10.4bn in F1Q12. Management
has guided for Capex of Rs40bn for F2012.
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