Idea Cellular - Volume decline surprised negatively, Retain REDUCE - Emkay

Reco: REDUCE
CMP: Rs81
Target Price: Rs72

- Revenues at Rs53.1bn (down 3.4% QoQ), EBITDA at Rs14.2bn (down 1% QoQ) and APAT at Rs2.3bn (down 9% QoQ). Lower marketing and distribution cost led to EBITDA beat

- Traffic on network surprised negatively with 4% qoq decline to 125.6bn mins. Voice ARPM declined 1% qoq to Rs0.35 on sustained pricing pressure, blended ARPM was flat at Rs0.41

- Lower subscriber addition and maturing voice market would impact volume growth going forward. Voice ARPM to remain stressed due to intense pricing competition

- Cut FY13E/14E revenue by 3.5%/3.4% due to lower subs addition. Revised EPS stand at Rs3/Rs4.6 for FY13E/14E. Maintain REDUCE with TP of Rs72

Source : Equity Bulls

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