Idea Q4 FY2012 and FY 2012 Results - First Cut

[RAJESH DESAI]

 

Dear Sir/Madam,

 

Idea Cellular Ltd announced its Q4 FY2012 and FY2012 results on 26 April 2012. A quick look of the same is as follows:

 

 

The company’s top line increased strong 6.7% sequentially to `5,369.7 Crores while its bottom line expanded 18.9% q-o-q to `239.0 Crores in Q4 FY2012.Growth in top line was fueled by another quarter of strong volume show. Driven by healthy subscriber additions, ‘voice minutes’ on Idea’s network augmented 9.1% sequentially to 124 Bn minutes compared with 114 Bn minutes in Q3 FY2012. However, this growth was partially offset by a slight decline in ARPM to 42.2p in Q4 FY2012 versus 43.3p a quarter earlier.

 

The company reported a 145 basis points (bps) sequential decline in EBIDTA margins. This can be attributed to a one off adjustment of regulatory impact in License and WPC fees. Consequently, License and WPC fees as a proportion of revenues stood at 13.7% of top line in Q4 FY2012 compared with 11.2% in Q3 FY2012 and 11.3% in Q4 FY2011.

 

We believe that Idea’s strong growth in voice minutes will remain ahead of its peers, who are yet to come out with their numbers for Q4 FY2012. Although the company’s quarterly as well as FY2012 performance remained impressive, high debt levels and continued regulatory uncertainty in the sector make the stock less attractive. Bharti with its expanded operations and healthy cash flows from operations will be in a better position to concur these negatives, in our view.

 

Regards,

 

Team Microsec Research

 

 

 

Microsec Capital Limited

Tel: 91 33 30512100

Fax: 91 33 30512020

 

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CA. Rajesh Desai