Messages for Idea Cellular Ltd |
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| 9. Sarita Soni 2/26/2010 10:07:38 AM IST |
Price @BSE - Rs 60.90 when posted |
| can i buy for 1 year . |
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| 8. Sanjay 1/9/2010 7:35:41 AM IST |
Price @BSE - Rs 60.55 when posted |
| Dont jump into Telecom Sector.Still its will go low...I dont think it will go upword now....Same with RCOM and AIRTEL..... |
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| 7. Sudhakarreddy 1/9/2010 4:15:27 AM IST |
Price @BSE - Rs 60.55 when posted |
| an IDEA can change ur life...........buy it very soon with low,they`ll be surely soes higher cost ....approx 110 |
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| 6. insight 11/9/2009 11:49:23 AM IST |
Price @BSE - Rs 50.10 when posted |
Idea Cellular
HOLD
Price: Rs50.60 Target Price (Sept 2010): Rs51
Walking a tightrope as tariff cuts take toll
* Maintain HOLD, TP lowered to Rs51: We expect IDEA`s FY10E-12E
growth profile to remain robust (EBITDA/EPS CAGR at 22%/13%), albeit
from a sharply lower base as impact of 50p/min and per-second billing on
revenues/margins, together with only marginal contribution to the bottom
line from Indus Towers manifest in 2HFY10E results; our FY10E normalized
net profit forecast for IDEA (Rs7 bn i.e. EPS of Rs2.2) is 19% below
consensus. In our view, peaking pressure on ARPMs and risk of
overstretched financials following 3G-related debt funding are likely to
hinder price performance over the next six months.
* IDEA`s latest prepaid offerings to yield ARPM of Rs0.44-Rs0.46: As
most operators, including IDEA, now offer similar priced unbundled per
second billing option to subs, propensity to switch operators and/or usage
of multiple SIMs for price arbitrage appears significantly reduced until
another bout of sharp tariff cuts manifest. By our calculations, IDEA`s
50p/min and 1p/sec prepaid offerings are likely to yield a blended ARPM of
44p-46p (prepaid/postpaid blended ARPM was 56p in 2QFY10).
* What`s changed: Capturing IDEA`s 2QFY10 financials, lower capex
guidance, stiffer decline in ARPUs, and slower ramp-up in profitability of
Indus Towers, we cut our FY10E/11E/12E consolidated EPS forecast for
IDEA by 18%/29%/23% respectively; implied 2HFY10E net profit is Rs2.2
bn (55% lower than normalized in 1HFY10 net profit).
* Valuations: Our 12-mth TP for IDEA (Rs51/sh vs. Rs61/sh previously) is
the sum of the DCF-based value of its wireless business (Rs36/sh) and fair
value of its 16% holding in Indus Towers (Rs15/sh). At Rs51, on our
FY11E earning forecast for IDEA, the stock would trade at 20.1x P/E and
6.7x EV/EBITDA; FY12E EBITDA/EPS growth is pegged at 24%/11%.
Investment Summary – Maintain HOLD, TP Rs51
As the impact of 50p/min and per-second billing plans manifest in 2QFY10
financials and competition peaks (tariff wars, new launches) over the next six
months, we expect IDEA`s stock price to remain under pressure over this
period. Maintain HOLD; CMP is almost at our revised 12-mth TP of Rs51.
We expect IDEA`s FY10E-12E growth profile to remain robust (EBITDA/EPS
CAGR at 22%/13%), albeit from a sharply lower base as wireless business
profitability is dented from lower realizations and contribution to bottom line
from Indus Towers is only marginal; implied 2HFY10E net profit is Rs2.2 bn
(55% lower than normalized in 1HFY10 net profit). By our calculations, IDEA`s
50p/min) plan and (1p/sec) plan for prepaid customers are likely to yield a
blended (voice + data) ARPM typically ranging between Rs0.44-0.46 excluding
any inflow from start-up/lifetime packs on gross adds (detailed in Exhibits 8-
10); IDEA`s prepaid/postpaid combined ARPM was Rs0.56 in 2QFY10.
Our FY10E normalized net profit forecast for IDEA (Rs7 bn i.e. EPS of Rs2.2) is
19% below consensus. We are in-line / ahead of consensus earnings forecast
for IDEA for FY11E/12E respectively (Exhibit 3). FY10E-12E earnings growth is
expected to materialize as pricing pressure mitigates, economies of scale kickin
and contribution from Indus Towers rises progressively. Our earnings
forecast for IDEA assumes a Rs40 bn debt-funded outgo towards securing 3G
spectrum in 4QFY10, with interest charges & amortization for the same kicking
into the P&L from 2HFY11.
Our 12-mth TP for IDEA (Rs51/sh vs. Rs61/sh previously) is the sum of the
DCF-based value of its wireless business (Rs36/sh) and fair value of its 16%
holding in Indus Towers post a 30% marketability/holding company discount
(Rs15/sh). At Rs51, on our FY11E earning forecast, IDEA would trade at 20.1x
P/E and 6.7x EV/EBITDA; FY12E EBITDA/EPS growth is pegged at 24%/11%.
Key risks to earnings forecast / valuations for IDEA – (1) Being a wireless
pure-play, earnings are highly sensitive to KPIs (traffic & tariffs); (2) EPSbased
multiples appear rich, potentially leading to further downtrend in stock
price; (3) A one-time charge for ‘excess` 2G spectrum would dent our earnings
forecast. We maintain that 3G-related debt-raising by IDEA will not stretch its
balance sheet to alarming levels; IDEA`s implied FY10E net-debt to equity and
net-debt to EBITDA ratios would be at 0.5x and 2.4x respectively. |
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| 5. Rajan 10/30/2009 10:56:08 AM IST |
Price @BSE - Rs 55.50 when posted |
Can Go More Down
Idea Cellular’s Q2FY10 results were below expectations, but more importantly key
operating metrics such as MoUs, ARPMs and churn declined steeply. Idea’s
(standalone) MoUs dipped 6% QoQ to 375mins/month and ARPMs declined 3.4%
to Rs0.56/min, while prepaid churn rose QoQ to 7.4% from 6.9%. While the battle
cry for price-based competition in the wireless space is loud and clear, the sharp
deterioration in metrics raises apprehensions. Idea faces the likelihood of
maximum damage due to the tariff cuts as it is an incumbent in its legacy circles &
a new entrant in many circles; also, it largely remains a pure-play wireless
operator versus integrated telecom plays such as Bharti Airtel (BAL) and Reliance
Communications (RCom). Reduction in capex guidance (sans 3G) to Rs45bn from
Rs55bn, without any change in roll-out plans, was the only positive. We lower
FY10E & FY11E earnings estimates 12% and 23.7% factoring in lower MoUs and
ARPMs. Results reinforce our negative view on Idea and we reiterate SELL with
revised target price of Rs48/share from Rs75/share. We maintain our cautious
outlook on Telecom owing to rising competition. |
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| 4. kunal 6/7/2008 8:05:12 AM IST |
Price @BSE - Rs 104.95 when posted |
Idea and Spice may be merging soon a deal between Idea, Telekom Malyasia and the Modis is expected to be signed under which Idea will buy into Spice after which a merged entity will be created.
Kumar Mangalam Birla, Kumar Mangalam Birla, Chairman, Aditya Birla Group, will finally be able to add Spice to his Idea as talks between his company Idea and Spice reaching its climax.
Idea is most likely to buy out the Modi's stake in Spice, which is about 40.8 per cent for about Rs 72 a share netting the Modis around Rs 2000 crore.
After the deal Idea is likely to merge Spice with itself giving Telekom Mlaysia which owns about 39.2 per cent stake in Spice, a proportional stake in the merged entity.
Idea will also come out with an open offer once it has bought the Modi stake.
Ever Since BK Modi shifted his interest towards entertainment, he has been looking to exit Spice Communication at a right price.
Modi recently bought 30 per cent stake in Sony Televison buying out the Indian investors in the company and part of the $500 milion he earns from this deal may go in funding his other buy.
The talks between Idea, Telekom Malaysia and the Modis have been going on for the last 45 days and Idea's biggest interest in Spice stems from the fact that it is operating in Punjab and Karnataka the two circles in which Idea doesn't have any presence so far.
Spice already has more than 4 million subscribers but it will be interesting to see what will be the role of Telekom Malysia in the merged entity as to how much will they get to hold in Idea once the merger is done.
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| 3. Amar 5/28/2008 11:24:16 PM IST |
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Buy@ Rs 108.8 For target of Rs 156 In 1 Year.By monetising 20% of its holding in Indus Towers, Idea has reduced its leverage from 1.5x to 0.6x, and armed itself
with enough cash and debt capacity to undertake both network growth in its existing circles and footprint expansion
in new circles, including potentially inorganic growth. We revise our revenue estimates for existing operations
upwards by 6% and 8% for FY09 and FY10 respectively, on the back of stronger-than-expected performance on the
subscriber addition and ARPU front. Idea also has been allocated spectrum in Tamil Nadu and Orissa circles, and will
likely begin operations this year. We include these two circles in our estimates, and this takes 12% off our FY10
earnings estimate. We retain BUY with a DCF-based target price of Rs156 (previously Rs148).
Funding problem solved for the present: By raising US$640m through compulsorily convertible preference shares
(CCPS) as an investment into its subsidiary Aditya Birla Telecom Limited (ABTL), Idea has reduced its debt-equity ratio to
0.6x. Idea can raise its cash reserves to nearly Rs130bn within a debtequity ratio of 2x. With this, network growth in its
current 11 circles as well as rollout in new circles can be executed for the first year, especially since rollout in the new
circles will be staggered. While Idea will need more funds to fund its longer-term capex for the remaining seven circles, the
dilution of stake in Indus is a positive move, especially as no dilution of rights in Indus Towers is involved.
Operations in existing circles strong, rollout to accelerate: By managing to raise usage minutes on its network by
9% sequentially in 4Q, Idea managed to increase its ARPU by nearly 3%, leading to a strong revenue growth of 15% QoQ.
With subscriber additions now averaging more than 1.1m per month, we raise our subscriber forecast for Idea (in its
current circles plus Mumbai and Bihar), for FY09 by 5% to 36m and for FY10 by 4% to 46m. We continue to model
declining ARPU as we believe that for the present, new subscriber addition will continue to be strong and drag ARPU down.
Spectrum in three new circles obtained&&; expect service launch by December 2008: Spectrum in Tamil Nadu
(including Chennai) and Orissa has already been obtained and the company expects to start service by December. We
expect spectrum in the remaining seven circles, including the prominent Punjab and Karnataka circles, to come Ideas way
in the next 12 months. We are adding these two circles in our model.
Launch in two new circles by December 2008
The company has obtained start-up spectrum in Tamil Nadu (including
Chennai) and Orissa and expects to start operations by December 2008.
Our implied capital productivity for these circles is well below Ideas
current levels. This is appropriate, as this metric normally goes up as
the network is grown to capacity, whereas in these new circles, Ideas
late entry would mean that the network would be coverage-driven,
limiting capital productivity. |
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| 2. shaheen 2/9/2008 9:14:16 AM IST |
Price @BSE -Rs 115.55 when posted |
buy buy idea cellular 1 year target 200 to 250 because next
revolution is india |
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| 1. Salim 1/14/2008 3:41:03 AM IST |
Price @BSE: 140 Rs when posted |
Source:Anagram
CPM:137
Traget:147--155
the daily chart pattern of the stock is showing strong accumulation in last few sessions.
We recommend buying the stock around 137 for the target of 147 and 155,Keeping a stoploss of 132. |
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