CLSA bearish on Idea Cellular, cuts share target to Rs 51 a piece
Updated : August 22, 2018 12:21 PM IST
In the June quarter, Idea Cellular’s EBITDA was at Rs 640 crore, down 36 percent, missed due to higher operational costs. The company reported a net profit of Rs 260 crore from a one-off gain from tower sales to ATC Telecom and its average revenue per user (Arpu) was at Rs 100, down 5 percent.
The telecom company’s subscriber base fell to 6.6 million in a quarter over quarter basis and its data subscriber fell 0.3 million in the quarter to 46 million.
Tariff wars initiated by Reliance Jio could negatively impact earnings and leverage. Realisation of merger synergies will be key. While we ignore termination penalties of Rs 4,500-5,000 crore in our estimates, if levied these could materially hit stock valuations.