Views on Reliance Communication 3QFY2014 results - Angel Broking

Views of Ms. Ankita Somani (Research Analyst -Telecom, Angel Broking) on Reliance Communication 3QFY2014 results:

"For 3QFY2014, Reliance Communication (RCom) results came a tad below our as well as street estimates. The company registered top-line of Rs. 5,403, almost flat sequentially. Revenues from India business also stood almost flat on a qoq basis at Rs. 4,637cr. Overall voice network traffic grew merely by 0.3% qoq to 101.9bn min, which is subdued considering 3Q is a strong quarter for telecom companies. Bharti and Idea also reported soft MOU performance, implying changing industry dynamics of slowing MOU due to free minutes being curtailed. In tandem with its peer companies, RCom also reported marginal increase in voice realization rate per minute (RPM) by 0.2% qoq to 43.5paise, aided by focus on paid and profitable minutes. The total data traffic was up 85.2% yoy at 41,702mn MB. The total data customer base has grown by 31.2% yoy to 36.2mn including 11.1mn 3G customers in 3QFY2014. EBITDA margin of the company came in at 34.8%, against our expectations of 34.2% which came in a positive surprise. PAT came in at Rs. 108cr, down 54% qoq, impacted by 11% qoq jump in interest charges. Even though operational margins of the company has improved considerably, almost flat revenue growth since last few quarters remain a cause of concern. We maintain Neutral rating on the stock."

Source : Equity Bulls

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