Angel Broking neutral on Reliance Comm

94078 Investors following Reliance Comm. Share this News with them.

0

Like this story, share it with millions of investors on M3

Angel Broking neutral on Reliance Comm

Angel Broking has maintained neutral rating on Reliance Communications, in its February 10, 2012 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Angel Broking neutral on SpiceJet Accumulate ICRA: PPFAS Research Accumulate GIPCL; target of Rs 91: Emkay ALSO READ See previous views by Angel Broking See what other Experts & Brokerages are saying about Reliance Comm See messages about Reliance Comm Reliance Comm BSE | NSE 31/05/12 Are Mutual Funds betting on Reliance Comm?

Angel Broking has maintained neutral rating on Reliance Communications , in its February 10, 2012 research report.

"For 3QFY2012, Reliance Communication (RCom) reported a muted set of results. The company's net sales grew by just 0.7% qoq even when 3Q is a seasonally strong quarter for telecom companies. RCom hiked voice tariffs on both on-net and off-net calls for GSM subscribers; and on CDMA, the company raised tariffs on only off-net calls. Since the hike has been undertaken largely on the GSM subscriber base, the impact of the same was less as compared to its peers, as the company is primarily CDMA based and, thus, tariff hike has not showed any signs of improvement in the APRU of RCom. Due to lack of triggers except the monetization of its Infratel business, which can cut down its debt by more than half, we remain Neutral on the stock."

"RCom reported revenue of Rs4,824cr, up merely 0.7% qoq, led by poor performance across all its business segments. Wireless revenue came in at Rs4,447cr, up just 0.7% qoq on the back of qoq flat average revenue per minute (ARPM) at Rs0.45/min and a 1.3% qoq decline in minutes of usage (MOU) to 224min, whose fall was slightly arrested by subscriber growth of 2.0% qoq. Thus, ARPU slipped by 1.0% qoq to Rs100 in 3QFY2012 from Rs101 in 2QFY2012. Overall EBITDA margin improved by 35bp qoq to 28.7% as employee costs and access charges declined by 10.9% and 7.2% qoq, respectively. However, network operating expenses grew by 8.8% qoq (includes one-time cost of Rs90cr)."

"Going forward, we expect RCom's mobile segment to record a 10.3% CAGR in its subscribers over FY2010-13E and ARPM to stabilize at Rs0.45/min in FY2013. Currently, the company is striving to reduce the debt level in its books and has again kept its stance of selling stake in its tower assets, which might help the company to deleverage its balance sheet and reduce debt and can be a positive trigger to the stock price. However, various other announcements of selling tower assets were made earlier as well, but none of them materialized. Also, RCom is trying to restructure debt in its books to reduce interest costs. We maintain our Neutral view on the stock," says Angel Broking research report.

Bodies Corporate holding more than 50% in Indian cos

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment