United States

Analyst Research Report Snapshot


Reliance Comm. Ltd (RCOM) | Q2FY13 Results Flash Note




IndiaNivesh Securities Pvt Ltd


08 Nov 2012





Companies referenced:


Available for Immediate Download

Result Updates Reliance Communication Ltd (RCOM) | Mixed performance - disappointment on net profit front Q2FY13 Results Flash Note |Reliance Communication Ltd (RCOM) Q2FY13 revenue and EBITDA was in-line with our and street; however, PAT was significantly below the consensus due to higher finance charges. The consolidated revenue de-grew by 2.2% qoq (+3.2% yoy) to Rs52.0bn (Bloom est: Rs.52.4bn). This led by (I) Wireless segment (down 2.3% qoq; nearly 63% to overall gross revenue), (II) Global enterprise business unit (down 0.7% qoq; nearly 34% to overall revenue) and (III) others (down 9.9% qoq, nearly 3% of overall revenue). During the quarter, consolidated EBITDA margin expanded 46.3 bps qoq to 31.5% (v/s Bloom est: 29.9%) due to lower loss in other segments. The company reported finance and depreciation charges of Rs.5930mn/Rs.9130mn (v/s Rs.5534mn/Rs9093 mn in Q1FY13). Despite weak currency, finance charges largely remain constant (+0.4% qoq) due to direct transfer of forex losses to foreign currency monetary item transaction difference account (FCMITDA). Rcom reported zero tax during the quarter (v/s tax benefit of Rs.40 mn Q1FY13). Minority interest stood at Rs.300mn (v/s Rs.290 mn in Q1FY13). The resultant net profit de-grew by 37.2% qoq to Rs.1020 mn (Bloom est: Rs.1,576 mn). Valuations and Outlook: At CMP of Rs.59, the stock is trading at 6.6x FY13E and 5.9x FY14E EV/EBITDA Bloomberg estimates, stretched relative to its peers. The company’s recent quarter performance was in-line with its peers. However, significant decline in the subscriber base was a surprise, resulted in significant jump in the major KPIs. We like Rcom’s strategy about 25% hike in pre-paid tariff. The uptake in 3G/Data usage looks positive in the long-run. However, delays in divestment of tower business and Flag Telecom listing remains a drag on stock price. Further high interest out-go remains a concern. We do not have a formal rating on the stock.

Why buy analyst research?

  • Institutional quality research
  • Available for Immediate Download
  • Detailed company or industry insight
  • Print or save
  • 24 hour customer support
Return to previous page without adding this item to your cart.
Email Customer Support.

About Analyst Research

Analyst research reports are available for immediate download after purchase. You will have unlimited access to the report for 24 hours after purchase, to download, print or save it as many times as you wish. Analyst Research provided by Reuters does not constitute investment advice, and is not endorsed by Reuters Research. This information is protected by copyright and intellectual property laws. More information on Analyst Research.