Angel Broking has come out with its earnings estimates on cement sector for December quarter FY13. The research firm expects revenue growth to be modest on the back of increase in MOU, a slight inch up in VAS share and flat voice ARPM. Amongst the top three operators, we expect Bharti and Idea to post a revenue growth of 0.7% and 2.6% qoq, respectively.
Angel Broking Q3FY2013 Results Preview for Telecom sector:For 3QFY2013, we expect revenue growth to be modest on the back of increase in MOU, a slight inch up in VAS share and flat voice ARPM. Amongst the top three operators, we expect Bharti and Idea to post a revenue growth of 0.7% and 2.6% qoq, respectively. On the EBITDA margin front, we expect the margin of Bharti to grow by 18bp qoq to 31.5% led by some improvement in domestic KPIs. The EBITDA margins of Idea and RCom are expected to increase by 29bp and 46bp qoq to 27.1% and 31.9%, respectively. Industry dynamics are currently pointing towards a possible consolidation in the near term. During the past two months, policy uncertainty regarding one-time spectrum fee and 2G auction were partially addressed but exact payout towards spectrum renewals, spectrum re-farming and excess charge remains uncertain as pan India reserve price remains undiscovered. In our view, telecom industry can improve structurally only after data revenues start picking up which still looks far. Telecom stocks are currently trading at close-to-moderate valuations, which we believe, is justified given the low business returns and partially uncertain environment which might pose huge risk to the overall profitability of these companies. We are currently neutral on the telecom sector and will refrain from taking any call till financial clarity on the stocks emerges. Bharti continues to be our preferred pick amongst telcos due to its low-cost integrated model (owned tower infrastructure), potential opportunity to scale up in Africa, established leadership in revenue and subscriber market share, relatively better KPIs and upside in stock price on account of listing of Bharti Infratel.Quarterly estimates (Rs Cr.)| Company | Net Sales | Net Profit | ||
| 3QFY13E | % chg | 3QFY13E | % chg | |
| Bharti Airtel | 20,415 | 0.7 | 910 | 26.2 |
| Idea | 5,453 | 2.6 | 251 | 4.7 |
| Rel Comm | 5,225 | 0.4 | 135 | 31.8 |
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