Tuesday 11 November 2008

Hold Idea Cellular, target of Rs 57: Emkay Global

Emkay Global Financial Services has recommended a hold rating on Idea Cellular with a target of Rs 57 in its November 7, 2008 research report. "Idea Cellular’ Q2FY09 results with 6% sequential drop in ARPU, 15% decline in EBIDTA, 660 bps fall in EBIDTA margins and 46% decline in PAT, came as big disappointment, mainly on account of the reflection of severe cost pressures towards extensive network rollout."

"With Idea Spice merger likely to be completed by end FY09, we continue to prefer valuing Idea Cellular based on combined (Idea + Spice) entity financials. We revise our target price on the stock to Rs 57 (from Rs 133 earlier) and recommendation from BUY to HOLD. Our target price is based on value of core business at Rs 43 per share (at 25% discount to Bharti Airtel’s core business target FY10E EV/EBIDTA of 8.8x) and value of 16% stake in Indus towers at Rs14 per share (taken at 50% of earlier value of Rs 27," says Emkay Global Financial Services' research report.

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Source: Moneycontrol

Posted by Harsh at 07:39

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