Prabhudas Lilladher has come out with its earnings estimates on Telecom sector for March quarter FY12.
Prabhudas Lilladher results estimates on Telecom Sector Bharti Airtel: We expect a ~2% QoQ decrease in India wireless voice ARPM as Bharti tactically tweaked pricing to stem the revenue market share erosion. This will drive total network minutes growth of 5.8% QoQ. Subscriber additions ramped up in February as Bharti looked to gain from the consolidation opportunity created by the SC verdict. We expect Africa to post a muted quarter with <1% QoQ growth in network minutes as the effect of seasonal weakness in Q4 was exacerbated by the disruptions owing to 10 days of civil unrest in Nigeria, its largest market. We maintain ‘Accumulate’ on the stock, with a target price of Rs378 based on 7x FY13E EV/EBITDA. Idea: We expect total MOU growth of ~6.5% QoQ, driven by ~1% QoQ reduction in ARPM as the incumbents stepped up the aggression in February. Idea continues to build scale in the circles affected by the SC verdict. We expect both, network operating costs and marketing costs, to remain high as Idea scales up its network and sub base. Further, rebidding for licenses in the circles affected by the SC verdict will extend payback periods for these circles. We maintain our ‘Reduce’ rating on Idea, with a target price at Rs88 based on 6.7x FY13E target EV/EBITDA. (Rs in million)| Company | Q4FY12E | Q4FY12 | YoY gr. (%) | Q3FY11 | QoQ gr. (%) | |
| Sales | 189,555 | 162,654 | 16.5 | 185,078 | 2.4 |
| Bharti Airtel | EBITDA | 63,656 | 54,442 | 16.9 | 59,584 | 6.8 |
| PAT | 13,071 | 14,008 | (6.7) | 10,114 | 29.2 | |
| Sales | 52,218 | 42,347 | 23.3 | 50,308 | 3.8 |
| Idea | EBITDA | 13,861 | 10,752 | 28.9 | 13,446 | 3.1 |
| PAT | 2,357 | 2,745 | (14.1) | 2,010 | 17.3 |
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