Thursday, 13 November 2008

Hold Idea Cellular, target of Rs 58: Indiabulls Securities

Indiabulls Securities Research has downgraded its rating on Idea Cellular to hold with a target price of Rs 58 in its November 5, 2008 research report. "Idea Cellular Ltd. (Idea) ended the second quarter with a mere 5.8% qoq revenue growth and a 15.8% decline in the EBITDA. At the CMP of Rs. 48, Idea’s stock is trading at a forward P/E of 18.9x FY09E and 11.4x FY10E. We have valued the stock by using SOTP and have arrived at a target price of Rs 58. Considering the reduction in the EBITDA margin and the heavy CAPEX, our DCF-based value of the core business has fallen to Rs. 39. We have reduced our value for Idea’s 16% stake in Indus Tower from Rs. 28 per share to Rs. 19 as valuation levels have cooled off considerably in the last quarter. Thus, we have downgraded our rating to Hold," says Indiabulls Securities' research report.

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Source: Moneycontrol

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