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B e t t e r - t h a n - e x p e c t e d s h o w …
Idea’s Q4FY11 results were better than our estimates. The company
reported a topline of | 4520.7 crore against our expectation of | 4392.4
crore, posting growth of 6.8% QoQ and 23.7% YoY. The growth in the
topline has been primarily on the back of a 6.5% sequential traffic growth
and 1.5% decline in ARPM. The subscriber base grew 6.3% QoQ to 95.1
million. EBITDA stood at | 1204.0 crore (I-direct estimate: | 1089.1 crore),
growing 12.0% QoQ and 35.5% YoY. The EBITDA margin increased 124
bps QoQ to 26.6%, primarily due to lower subscriber acquisition cost in
this quarter on account of lower net additions and also due to lower ad
spend in this quarter after having done a huge ad spend in during the ICC
World Cup. PAT for the quarter stood at | 177.3 crore, de-growing 35.4%
QoQ and 12.0% YoY owing to interest cost and amortisation related to 3G
being charged to P&L and a higher tax rate.
ƒ Highlights of the quarter
Idea reported a marginal 0.6% dip in ARPU to | 160 from | 161 in
Q4FY11. MoU stood at 391 minutes, falling 1.5% from 397 minutes
in Q4FY11 while the ARPM increased 1.0% to 41.0 paisa from 40.6
paisa in Q4FY11. The subscriber base registered a growth of 6.3%
(5.6 million) to 95.1 million subscribers. Total traffic grew 6.5% to
108.6 billion minutes.
V a l u a t i o n
Idea reported better-than-expected numbers for the quarter on the
operational front. Traffic growth was impressive at 6.5% QoQ coupled
with a slight increase in ARPM. However, due to charging of 3G related
interest cost & amortisation and higher tax rate, PAT recorded a
sequential decline of 35.4%. The tax rate was higher at 30.5% due to tax
holiday getting over for pre 1999 licenses. At the CMP of | 94, the stock is
valued at 27.3x FY13E EPS. Our SOTP target price stands at | 104 (using
DCF we have arrived at a target price of | 85 for the core business and |
19 for Indus contribution). We upgrade the stock from HOLD to BUY.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
B e t t e r - t h a n - e x p e c t e d s h o w …
Idea’s Q4FY11 results were better than our estimates. The company
reported a topline of | 4520.7 crore against our expectation of | 4392.4
crore, posting growth of 6.8% QoQ and 23.7% YoY. The growth in the
topline has been primarily on the back of a 6.5% sequential traffic growth
and 1.5% decline in ARPM. The subscriber base grew 6.3% QoQ to 95.1
million. EBITDA stood at | 1204.0 crore (I-direct estimate: | 1089.1 crore),
growing 12.0% QoQ and 35.5% YoY. The EBITDA margin increased 124
bps QoQ to 26.6%, primarily due to lower subscriber acquisition cost in
this quarter on account of lower net additions and also due to lower ad
spend in this quarter after having done a huge ad spend in during the ICC
World Cup. PAT for the quarter stood at | 177.3 crore, de-growing 35.4%
QoQ and 12.0% YoY owing to interest cost and amortisation related to 3G
being charged to P&L and a higher tax rate.
ƒ Highlights of the quarter
Idea reported a marginal 0.6% dip in ARPU to | 160 from | 161 in
Q4FY11. MoU stood at 391 minutes, falling 1.5% from 397 minutes
in Q4FY11 while the ARPM increased 1.0% to 41.0 paisa from 40.6
paisa in Q4FY11. The subscriber base registered a growth of 6.3%
(5.6 million) to 95.1 million subscribers. Total traffic grew 6.5% to
108.6 billion minutes.
V a l u a t i o n
Idea reported better-than-expected numbers for the quarter on the
operational front. Traffic growth was impressive at 6.5% QoQ coupled
with a slight increase in ARPM. However, due to charging of 3G related
interest cost & amortisation and higher tax rate, PAT recorded a
sequential decline of 35.4%. The tax rate was higher at 30.5% due to tax
holiday getting over for pre 1999 licenses. At the CMP of | 94, the stock is
valued at 27.3x FY13E EPS. Our SOTP target price stands at | 104 (using
DCF we have arrived at a target price of | 85 for the core business and |
19 for Indus contribution). We upgrade the stock from HOLD to BUY.
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