Idea Cellular Puts Up A Good Show For Q1FY14

'A stupendous performance' is probably the only way to describe the financial performance of Idea Cellular for Q1FY14. The company has beaten street expectation on all front to post a net profit of Rs 462.7 crore. The bottomline shot up by 97.6% on a YoY basis and 50% on sequential basis for Q1FY14. The rise in the net profit can be attributed to robust voice and mobile data revenue coupled with scale benefits and better cost management. The topline on a consolidated basis grew by 18.8% on a YoY basis to stand at Rs 6539 crore for the quarter ended June 2013.

EBITDA gained by 44.6% on yearly basis to stand at Rs 2076 crore and operating profit margin surged 420 bps sequentially to 31.8% The street were expecting an EBITDA margin of around 28 to 30% for the quarter. What can be highlighted here is that the finance cost was lower by Rs 9.5 crore, after accunting for Rs 23 crore foreign exchange losses. The net debt reduced from Rs 11588 crore in Q4FY13 to Rs 10219.9 crore during this quarter. The net debt to EBITDA is at 1.39 which lowest in the industry.

The voice minutes expanded by 12.5% on YoY basis to 147.3 billion minutes in June quarter, supported by net annual new customer addition of 7.8 million. Cumulative subscriber base increased to 125 million as on June 30. The data volume growth also improved and stood at 92.2% to 13.8 billion crore megabytes usages in first quarter of FY14. The average realised rate per minute (ARPM) improved by 2.5 paisa per minute (6%) to 43.7 paisa per minute on promotional fee/discounted minutes for new & existing customers and higher contribution from VAS (Value Added Service) services. VAS contribution increased to 16% as against 15.2% on sequential basis.

In another development, company is also going to issue shares to raise Rs 3750 crore, date and timing of which will be decided later on. This will remain a hang on the share price of the company for a while, despite good quarterly show.