Idea Cellular slips after Q3 results

The result was announced after market hours on Tuesday, 29 January 2013.

Meanwhile, the BSE Sensex was up 60.67 points, or 0.30%, to 20,051.57.

On BSE, 29,000 shares were traded in the counter as against an average daily volume of 3.07 lakh shares in the past one quarter.

The stock hit a high of Rs 113.80 and a low of Rs 110.50 so far during the day. The stock had hit a 52-week high of Rs 124 on 16 January 2013. The stock had hit a 52-week low of Rs 71.20 on 24 April 2012.

The stock had outperformed the market over the past one month till 29 January 2013, rising 9.19% compared with the Sensex's 2.81% rise. The scrip had also outperformed the market in past one quarter, rising 36.01% as against Sensex's 7.27% rise.

The large-cap company has an equity capital of Rs 3312.83 crore. Face value per share is Rs 10.

On a standalone basis, net profit rose 13.21% to Rs 191 crore on 10.8% growth in gross revenue to Rs 5613.50 crore in Q3 December 2012 over Q3 December 2011.

In-spite of regulatory interventions impacting subscriber acquisition and the value added services business model, Idea reported a sequential quarterly revenue growth of 5% in Q3 December 2012. The quarterly revenue growth is primarily led by expansion of Voice Minutes of 5.2% to 132.2 billion minutes in Q3 December 2013 from 125.6 billion minutes in Q2 September 2012, indicating consumer demand for voice telephony remains robust, Idea Cellular said in a statement. The company clocked 2.9 million VLR subscriber additions in Q3 December 2012, against 0.6 million additions in Q2 September 2012, despite implementation of stricter verification norms. Contrary to expectation, the Average Realised Rate per Minute (ARPM) fell to 41.1 paisa in Q3 December 2013 from 41.3 paisa in Q2 September 2012. The challenge on ARPM is on account of fall in the Non-Voice Revenue contribution to 14.6%, driven down 1% over the last quarter, by TRAI's new VAS regulation, Idea said.

The standalone EBITDA rose to Rs 1317.30 crore in Q3 December 2012 from Rs 1261.50 crore in the previous quarter. The EBITDA margin is marginally lower at 23.5% on account of higher inflationary burden in 'Network operating expense' led by full quarter impact of increased diesel price and larger outlay for 'Advertising & Business Promotion' expense. The cost of acquiring a customer also increased to meet the new guidelines on subscriber verification, largely offsetting the benefit of lower customer churn of 6.9% and reduced gross additions, Idea said. Adverse currency movement resulted in forex loss of Rs 13.30 crore in Q3 December 2012, against a forex gain of Rs 18 crore in Q2 September 2012, reflected in increased interest and finance cost (net), Idea said.

The company had net debt of Rs 11680 crore as on 31 December 2012 with net debt to equity ratio at 0.83 and Net Debt to EBITDA (Annualised) ratio for the quarter at 2.22. The Net-Worth of Rs 14020 crore, together with an average (last four quarters) cash profit of Rs 1100 crore per quarter, provides a solid foundation to support the company's strategic intent, Idea Cellular said in a statement. The capex guidance for FY 2013 stands at Rs 3000, excluding spectrum payout.

Idea Cellular said that the company's global scale of operations, serving around 114 million quality subscribers, generating over 1.44 billion minutes per day, provides the company a strong hedge to counter the emerging headwinds from the uncertain regulatory interventions and weak macroeconomic environment. Idea continues to invest long term value creators -- it launched 2,961 new sites (2G+3G), expanded optical fibre network to 71,600 km and strengthened network capacities in NLD, ILD, ISP, Data Services and Devices. Out of the existing 114 million subscriber base, the number of Idea customers adopting data services has grown to 21.75 million, now contributing 5.7% to total service revenue. The data volume grew by 14.8% to 9,575 TB in Q3 December 2012 (8,339 TB in Q2 September 2012), while revenue on sequential quarter basis grew by 10.8%. The active 3G subscriber base for the company now stands at 4.1 million.

Idea is confident to overcome the current uncertain regulatory phase, emerge competitively stronger as the overcapacity comes to an inevitable decline, consolidate its position in the telecom voice market and aggressively expand in the ever evolving wireless broadband business, the company said in a statement.

Idea Cellular is India's 3rd largest mobile operator, with over 115 million subscribers.

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