Q4 financial data released by TRAI shows wireless industry gross revenues grew at an accelerated pace of 3.1% qoq vs. an adjusted 2.8% in Q3.
Q4 financial data released by TRAI shows wireless industry gross revenues grew at an accelerated pace of 3.1% qoq vs. an adjusted 2.8% in Q3. Idea yet again led industry growth with an 8.9% qoq rise in gross revenues and ended FY13 with 15.7% revenue market share (RMS), a rise of 83bps qoq. On the other hand, Bharti lost 43bps RMS as its gross revenue growth of 1.7% qoq lagged that of industry, though Q4 included bad debt provision. BSNL & MTNL combine RMS share continues to be highly volatile, rising 30bps qoq. Unlike Bharti, Vodafone revenues outpaced industry growth at +5.2% qoq which supported a 45bps rise in RMS to 23%. Uninor, as expected, continues to sheds revenues in non operating circles though the pace of gross revenue decline accelerated to 14% qoq and RMS dropped below 2%. Rcom's gross revenue performance improved qoq driven by better traffic growth though still below Q4 industry run rate.
A likely improvement in tariffs, though gradual, along with robust data growth augurs well for the sector even as regulatory clouds persist; in lieu of recent correction in Bharti, we upgrade the stock to BUY with unchanged 9-12 month target of Rs340 while lower out rating on Idea to Market Performer but retain 9-12 target of Rs140.
Idea continues trend of RMS gains, Bharti rev share dips marginally
Wireless industry revenues grew faster at 3.1% qoq vs. 2.8% on an adjusted basis in Q3; Idea, expectedly led industry growth as it posted a robust 8.5% qoq rise in Q4 traffic which translated in to an 8.9% jump in gross revenues and company ended FY13 with RMS of 15.7%. Bharti lagged industry revenue rate and saw a slight dip in RMS while Vodafone raised its RMS to 23% driven by 5.2% qoq rise in Q4 revenues. Uninor saw steep revenue fall in Kolkata, Mumbai and WB as it truncates operation in these circles which led to 14% qoq fall in GR.
Bharti | Idea | |||
Y/e 31 Mar (Rs m) | FY14E | FY15E | FY14E | FY15E |
Revenues | 897,449 | 990,874 | 252,664 | 283,232 |
yoy growth (%) | 11.7 | 10.4 | 12.5 | 12.1 |
Operating profit | 280,004 | 310,143 | 67,209 | 75,623 |
OPM (%) | 31.2 | 31.3 | 26.6 | 26.7 |
Reported PAT | 36,949 | 48,302 | 13,293 | 16,507 |
yoy growth (%) | 62.4 | 30.7 | 31.5 | 24.2 |
EPS (Rs) | 9.7 | 12.7 | 4.0 | 5.0 |
P/E (x) | 29.7 | 22.7 | 33.9 | 27.3 |
Price/Book (x) | 2.0 | 1.9 | 2.9 | 2.6 |
EV/EBITDA (x) | 6.2 | 5.0 | 8.2 | 7.4 |
Debt/Equity (x) | 1.2 | 0.8 | 0.9 | 0.9 |
ROE (%) | 7.1 | 8.7 | 8.9 | 10.1 |
RoCE (%) | 8.3 | 9.4 | 9.5 | 11.0 |
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