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| India Infoline Research Team / 17:40 , May 08, 2012 |
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- Q4 revenues/EBIDTA up 5.2%/5.5% qoq but PAT impacted by lower other income and higher tax outgo on account of transfer pricing agreements related to Telefonica countries in Latin America; co announces dividend of Re1/share
- International revs grew 14.6% sequentially and accounted for 52% of Q4 topline; Lat Am comprised 15% of total revs. Slowdown in India VAS market continued with 3.3% qoq dip in revenues; company has augmented portfolio with launch of data products in the domestic market which would help tap the fast growing 3G data market
- EBIDTA margin mostly flat qoq at 23.3%; other expenses increased ~18% qoq due to inclusion of certain indirect taxes related to Lat Am operations
- Higher tax rate, depreciation and lower other income resulted in a 73% qoq decline in reported PAT; company mentioned it is in the process of finalizing taxation/transfer pricing structure for remaining Lat Am countries and effective tax rate should rationalize over the year. YoY PAT not comparable as Q4 FY11 included one time gain from stake sale in Ver se Innovation
- FY12 capex stood at Rs580mn (~9% of sales) and guidance for FY13 stands at Rs600-700mn (9% of FY13E revenues) of which 20-30% would be incurred on domestic operations.
- Based on FY12 results, we increase tax rate assumption (by 400bps) and depreciation for FY13/14; consequently, we revise lower our FY13 EPS estimates and but maintain BUY with fresh 9-mth target of Rs82 (earlier Rs95)
Results table
(Rs m)
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Q4 FY12
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Q3 FY12
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% qoq
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Q4 FY11
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% yoy
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Net sales
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1,776
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1,688
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5.2
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1,333
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33.2
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Content fee & royalty
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(248)
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(216)
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15.2
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(138)
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80.5
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Sales & services
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(126)
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(154)
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(18.2)
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(114)
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11.2
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Personnel costs
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(622)
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(617)
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0.9
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(484)
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28.7
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Other expenses
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(366)
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(311)
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17.7
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(289)
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26.5
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Operating profit
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413
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392
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5.5
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310
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33.4
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OPM (%)
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23.3
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23.2
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7 bps
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23.2
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3 bps
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Depreciation
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(260)
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(235)
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10.5
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(144)
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79.8
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Interest
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(15)
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(7)
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108.3
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(6)
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167.9
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Other income
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42
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65
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(34.6)
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246
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(82.8)
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PBT
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181
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214
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(15.6)
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406
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(55.4)
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Tax
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(133)
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(36)
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266.1
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(137)
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(2.9)
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Effective tax rate (%)
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73.5
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16.9
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5,656 bps
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33.7
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3,978 bps
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Reported PAT
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48
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178
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(73.1)
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269
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(82.2)
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PAT margin (%)
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2.7
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10.5
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(784) bps
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20.2
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(1,746) bps
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Source: Company, India Infoline Research
Financial summary
Y/e 31 Mar, Rs m
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FY11
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FY12E
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FY13E
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FY14E
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Revenues
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5,372
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6,380
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7,803
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9,539
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yoy growth (%)
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18.2
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18.8
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22.3
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22.3
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Operating profit
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1,208
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1,399
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1,740
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2,156
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OPM (%)
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22.5
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21.9
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22.3
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22.6
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Reported PAT
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892
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830
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688
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931
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yoy growth (%)
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108.4
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(6.9)
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(17.1)
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35.3
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EPS (Rs)
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7.8
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7.2
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6.0
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8.1
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P/E (x)
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7.1
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7.4
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8.9
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6.6
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P/BV (x)
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0.8
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0.7
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0.7
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0.6
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EV/EBITDA (x)
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4.7
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2.9
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2.9
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2.0
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ROE (%)
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11.3
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9.7
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7.5
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9.5
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ROCE (%)
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8.2
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8.2
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10.9
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14.0
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Source: Company, India Infoline Research
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