RComm Q3: Analysts see profit rising 76.5% QoQ to Rs 180 cr

Reliance Communications is set to declare its results for the third quarter of financial year 2012-13 on Wednesday, for the first time before its rivals Bharti and Idea Cellular get announced. Analysts on an average expect profit after tax to grow by 76.5 percent quarter-on-quarter to Rs 180 crore in the quarter due to low base.

Good numbers may possibly be due to one-off gains or good execution in October-December, say analysts.

Revenues are seen going up by 1.5 percent to Rs 5,278 crore from Rs 5,202 crore during the same period.

Earnings before interest, tax, depreciation and amortisation (EBITDA) are expected to go up by 3.8 percent QoQ to Rs 1,700 crore and EBITDA margin is seen improving to 32.2 percent as against 31.5 percent.

Analysts expect revenue per minute (RPM) at 43.5 paise in October-December quarter as against 43 paise in previous quarter.

Average revenue per user increased to Rs 113 in December quarter as against Rs 102 in September quarter. Minutes of usage too went up to 259 from 236 QoQ.

Q3 highlights

According to analysts, third quarter is a seasonally stronger quarter. However, growth will be limited by weakness in new subscriber additions, say analysts.

Margin improvement is likely due to increased focus of telecom company on RPM and profitability. Hence, RPM will also improve sequentially.

Reliance Communications' wireless RPM has been steady over the past 10 quarters.

The research firm Motilal Oswal, in its report on Tuesday, upgraded the stock on CEO comments. "RPM improvement is a key focus area," the firm reasoned.

According to report, the management outlined plans for reduction in network costs by 10-12 percent and lowering subscriber acquisition/employee costs.

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