Idea Cellular (Q4 FY13)

India Infoline News Service | Mumbai |

Idea posted stellar Q4 numbers with significant beat on both revenues and PAT; revenues grew 8.7% qoq (vs est +3.5%) while PAT jumped ~35% vs projected 19% qoq. co declared maiden dividend of 30p/share

CMP Rs123, Target Rs138, Upside 12.5%

  • Idea posted stellar Q4 numbers with significant beat on both revenues and PAT; revenues grew 8.7% qoq (vs est +3.5%) while PAT jumped ~35% vs projected 19% qoq. co declared maiden dividend of 30p/share  

  • Revenue growth was underpinned by strong volume growth of 8.5% qoq as company would have probably benefited from the shutting down of operations by other newer operators and strong seasonality tailwind

  • OPM sported a 119bps qoq rise (vs est +29bps) on lower access charges and network opex; SG&A expenses were flat sequentially despite reduced churn of 4.4% from 7% in Q3; margins rose despite one off charge of Rs760mn in license and WPC fees

  • VAS revenue share improved to 15.2% vs 14.6% in Q3; data realization too perked up 9.3% qoq to 33.9p/MB with total data subscribers of 26.2mn (of which 5.1mn are active 3G users)

  • PAT at Rs3.1bn beat our forecast of 2.7bn on better revenues and improved margins and despite ~8.5ppts qoq rise in tax rate; Q4 FY13 capex of Rs13.3bn excluded FX fluctuation and spectrum payouts while FY13 total capex stood at Rs33.6bn. co guided for Rs35bn in FY14 capex  

  • Idea has had a robust Q4 as despite one offs, EBIDTA and PAT outpaced our expectations; based on FY13 full year figures, we revise upwards FY15 EPS estimate and upgrade the stock to BUY with revised 9-12 month target of Rs138 (earlier Rs117).

Results table
(Rs m) Q4 FY13 Q3 FY13 % qoq Q4 FY12 % yoy
Net sales 60,614 55,786 8.7 53,697 12.9
Access and I/C charges (10,770) (10,183) 5.8 (9,144) 17.8
Network opex (14,298) (14,209) 0.6 (12,579) 13.7
License fees (7,191) (5,897) 21.9 (7,373) (2.5)
Personnel costs (2,976) (2,731) 9.0 (2,548) 16.8
S G & A  expenses (8,649) (8,033) 7.7 (8,483) 2.0
Operating profit 16,731 14,734 13.6 13,571 23.3
OPM (%) 27.6 26.4 119 bps 25.3 233 bps
Depreciation (9,092) (8,836) 2.9 (7,844) 15.9
Interest (2,244) (2,416) (7.1) (2,275) (1.3)
PBT 5,395 3,482 54.9 3,453 56.2
Tax (2,313) (1,196) 93.3 (1,063) 117.6
Effective tax rate (%) 42.9 34.4 852 bps 30.8 1,209 bps
PAT 3,082 2,286 34.8 2,390 29.0
PAT margin (%) 5.1 4.1 99 bps 4.5 63 bps
Source: Company, India Infoline Research

Financial summary
Y/e 31 Mar (Rs m) FY12 FY13E FY14E FY15E
Revenues 194,887 224,577 252,664 283,232
yoy growth (%) 26.2 15.2 12.5 12.1
Operating profit 50,399 60,045 67,209 75,623
OPM (%) 25.9 26.7 26.6 26.7
Pre-exceptional PAT 6,989 10,109 13,293 16,506
Reported PAT 7,230 10,109 13,293 16,506
yoy growth (%) (19.6) 39.8 31.5 24.2
         
EPS (Rs) 2.2 3.1 4.0 5.0
P/E (x) 56.3 40.3 30.7 24.7
P/BV (x) 3.1 2.8 2.6 2.4
EV/EBITDA (x) 10.8 8.9 7.6 6.8
Debt/Equity (x) 1.1 1.1 0.9 0.9
ROE (%) 5.5
BSE 95.75 [0.40] ([0.42]%)
NSE 95.75 [0.45] ([0.47]%)

***Note: This is a NSE Chart

 

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