Investors dump Idea post firm Q4; analysts still bullish

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26 Aug, 2025 12:21

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Investors are dumping shares of Idea Cellular even after a strong March quarter results. Shares of the telecom company slipped 4 percent intraday on Wednesday. However, most analysts are positive on the stock.

Kotak has a buy rating with a target of Rs 220 per share insisting that despite sharp voice revenue per minute (RPM) decline, it delivered a more-than-robust 40 percent growth in standalone EBITDA.

CLSA retains buy rating on the stock and upgraded  EBITDA estimates by 1-3 percent for FY16-18 mainly led by higher margins. "We forecast Idea EBITDA to grow at 19 percent CAGR over FY15-18. Besides in the recent spectrum auction Idea secured crucial renewal spectrum in nine circles, ending the longstanding overhang on its core business, but gearing has jumped to 3.9x net debt to EBITDA with the aggregate Rs 30100 crore /USD 4.8 billion spectrum auction spend including the deferred spectrum payments," it says in a report.

JP Morgan, meanwhile, is neutral on the stock stating there was there was not much to cheer in Idea’s Q4FY15 results.

"Optimists hoping for a pricing uptick post-auction should be concerned about the continuing decline in voice pricing. Its voice ARPM declined 4.8 percent quarter-on-quarter and 7.1 percent year-on-year, third straight quarter of declines," it warns.

However, Nomura has a reduce rating with a target of Rs 135 per share. "Spectrum related depreciation and amortisation (D&A)/interest costs are not visible yet and this will likely cause volatilities to earnings in FY16 and beyond. Idea's capex for FY15 was Rs 4000 crore and for FY16, it expects to spend Rs 5000-Rs 5500 crore. While capex is a good thing, this will also add to earnings pressure," it elaborates.

At 12:18 hrs the stock was at Rs 186.10, down Rs 5.45, or 2.85 percent on the BSE.

Posted by Nasrin Sultana