views of Ms. Ankita Somani (Research Analyst-IT & Telecom) on Idea Cellular 1QFY2014 results: “For 1QFY2014, Idea Cellular (Idea) reported strong set of results, beating our as well as market expectations on all fronts. Idea’s consolidated revenue came in at `6539cr, up 7.9% qoq. The mobility segment’s revenue increased strongly by 8.3% qoq to `6,447cr, riding on healthy customer additions and greater pricing power after the exit of several smaller competitors from the market. The company’s revenue growth was led by 6.1% qoq increase in realization per minute (RPM) to ~`0.44, aided by reduction in promotional vouchers. Network traffic grew by 2.8% qoq to 147bn min. MOU declined by 2.0% to 398min which came in as a negative surprise. Idea’s subscriber base increased by 3.4mn subscribers during the quarter with the end of period (EoP) subscriber base standing at 125mn. The company increased share of VAS revenues to 16.0% from 15.2% in 4QFY2013. Idea’s EBITDA margin increased substantially by ~410bp qoq to 31.8%. The EBITDA margin increase was led by strong revenue growth along with reduction in subscriber acquisition & marketing cost which has fallen by ~9.4% qoq in 1QFY2014 vs. 4QFY2013. PAT came in at `463cr, up 50% qoq, led by strong operational performance and qoq lower tax rate at 36% as against 43% in 4QFY2013. Idea’s 1QFY2014 results underscore declining competitive intensity which should support strong EBITDA growth for Indian wireless incumbents. Most operators, including Idea, have been rationalizing pre-paid tariffs as RPM and profitability improvement remains a key focus area across the industry. With improving operational performance, the company still remains surrounded by regulatory uncertainties with regards one-time spectrum fee, 3G roaming pacts cancellations and spectrum refarming.”
Posted on: Thu, 01 Aug 2013 23:36:07 +0000
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