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Idea Cellular: Profits Remain Flat - Views on News from Equitymaster
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Idea Cellular: Profits Remain Flat
Apr 8, 2016

Idea Cellular has declared the results for the third quarter of FY16. The company has reported a 12.4% YoY increase in revenues and a 0.4% YoY decline in net profits during the quarter. Here is our analysis of the results.

Performance summary
  • Consolidated sales grew by 12.4% YoY during 3QFY16. The good topline growth was due to an 20.9% YoY increase in total subscriber base as well as an 16.7% YoY growth in total minutes billed during the quarter.
  • Mobile subscriber base grew by 6.5% QoQ during the quarter. Total count of subscribers stood at around 181.9 m at the end of December 2015.
  • Operating margins fell to 34.7% in 3QFY16 from 35% seen during 3QFY15. The operating profit increased by 11.4% YoY.
  • Net profit decreased by 0.4% YoY during the quarter. The bottomline was affected due to lower other income as well as higher interest costs in the quarter. The net margins fell to 8.5% as compared to 9.6% during 3QFY15.

    Consolidated financial snapshot

    (Rs m) 3QFY15 3QFY16 Change 9MFY15 9MFY16 Change
    Sales 80,175 90,097 12.4% 231,484 264,971 14.5%
    Expenditure 52,094 58,812 12.9% 154,012 170,832 10.9%
    Operating profit (EBITDA) 28,081 31,285 11.4% 77,472 94,139 21.5%
    Operating profit margin (%) 35.0% 34.7% 33.5% 35.5%
    Other income 1,326 308 -76.8% 2,833 1,869 -34.0%
    Finance charges 2,309 3,657 58.4% 7,535 10,736 42.5%
    Depreciation 15,381 16,231 5.5% 38,159 46,771 22.6%
    Profit before tax 11,717 11,705 -0.1% 34,610 38,501 11.2%
    Tax 4,046 4,063 0.4% 12,099 13,458 11.2%
    Net profit 7,671 7,642 -0.4% 22,511 25,043 11.2%
    Net profit margin (%) 9.6% 8.5% 9.7% 9.5%
    No. of shares 3,600.4
    Diluted Earnings per share (Rs)* 9.6
    P/E ratio (x)* 11.4

    * On a trailing 12 months basis

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