Motilal Oswal neutral on Reliance Communications

Motillal Oswal has maintained neutral rating on Reliance Communications with a target price of Rs 90 in its January 24, 2013 research report.

"Motillal Oswal has maintained neutral rating on Reliance Communications with a target price of Rs 90 in its January 24, 2013 research report.
“Reliance Communications' 3QFY13 EBITDA grew 3% YoY and 1% QoQ to INR16.5b (v/s est of INR17.1b). Consolidated revenues grew 5% YoY and 2% QoQ to INR53b (v/s est of INR52.7b). Reported net profit of INR1.05b (down 44% YoY but up 3% QoQ) was below our estimate of INR2.2b on lower EBITDA and higher finance costs.Wireless revenues grew 2% YoY/QoQ to INR45.2b v/s est of INR45.4b. Excluding impact of revenue loss due to closure of Etisalat DB operations, wireless revenues grew 4.7% YoY.”

"Wireless EBITDA grew 2% YoY/QoQ to INR12.1b (EBITDA margin of 26.7%). Excluding Etisalat DB closure impact, wireless EBITDA grew 15% YoY. Wireless traffic grew 3% YoY and 0.5% QoQ to 103b minutes, while RPM improved 1.5% QoQ to ~44p. GEBU revenues/EBITDA remained largely flat YoY/QoQ. Wireless RPM increase of 1.5% QoQ for RCom underscores enhanced industry focus on RPM improvement. During September 2012, RCom had undertaken a base tariff increase from 1.2p/s to 1.5p/s.We maintain our revenue and EBITDA estimates for FY14E/15E."

"The stock trades at EV/EBITDA of 8.1x FY13E and 6.6x FY14E. Maintain neutral with a target price of INR90/sh based on 6x FY15,” says Motilal Oswal research rerpot.

FIIs holding more than 30% in Indian cos

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