Idea Cellular

Idea may settle in the price band of 30-40....

Posted by : marketman

Trade in the said band till the next quarter results come in....

Idea may settle in the price band of 30-40....

Posted by : ar_akm

Hi marketman, What are your views about idea Celluar keeping in view the present market sentiments. This is in context to your message dated 28.10.08:07.28. As more bad news are being heard through news papers that

BUY for LT

Posted by : man

Dear VKK$,
thanks for your reply and which is always very prompt and i do admire this habit of yours.
This comes more in South Indian culture.
Souravkundu is also same kind of person.
Regards,
Manher

BUY for LT

Posted by : vkk43

According to me 40/41 should be a good level to enter into this stock for LT.

BUY for LT

Posted by : man

Dear VKK4,
At what level we can buy this stock in small qty.
I have this stock in my folio from IPO last year.
Now needs to average out value wise.

BUY for LT

Posted by : vkk43

Investment for two years perspective can be made in this share.
Source - BL

Margins to remain subdued going forward: Idea Cellular

Posted by : My Multibaggers

Q: Any other active acquisitions that you are looking at?



A: Generally not us. I think you won’t see that many acquisitions in the sector because a lot of the acquisitions were driven by getting new circle areas and sometimes by getting a better quality spectrum. Going forward, those opportunities have gone so you would see intra-circle acquisitions, which are not nearly as attractive as inter-circle ones. That’s again something, which has changed forever but the markets haven’t caught on to it. There is always a lag between evidence and when there is a fundamental change — and telecom has gone through a fundamental change in the last few months.



Q: Were you surprised at the price at which the Unitech-Telenor deal was struck and the inclination of a lot of players to come in at that kind of a price point?



A: I am not surprised because the financial and the international telecom community continues to view telecom in India through the prism of the last five years and the underlying changes that may have happened. It may have clearly not been manifested, may not be visible to all, so to that extent I am not surprised. I was there I would have done it, but I am not surprised it has happened



Q: You are sounding a bit cynical about prospects, are you saying that the ground rules have changed from the last two-three years?



A: We had an earnings call and I have mentioned that our company has never been stronger. The arbitrage opportunities, the wealth being created on paper, those kind of opportunities are probably gone.



But do not forget that telecom is a huge sector, it is still growing and companies like ours have the potential of becoming strong competitive players and large companies.



Then cycles will come and go like they do for every other sector but I see the big opportunity in terms of positioning your company for durable success not for two years but for ten years and that opportunity is now.



Stock price is affected by number of buyers and number of sellers. So if there are more sellers and buyers, it determines the price. I do not know — I was watching your channel and someone opined that markets will stay in a band and then through in January, we will watch all this.



But we are basically managers. We do what we have to do.

Margins to remain subdued going forward: Idea Cellular

Posted by : My Multibaggers

Q: Any other active acquisitions that you are looking at?



A: Generally not us. I think you won’t see that many acquisitions in the sector because a lot of the acquisitions were driven by getting new circle areas and sometimes by getting a better quality spectrum. Going forward, those opportunities have gone so you would see intra-circle acquisitions, which are not nearly as attractive as inter-circle ones. That’s again something, which has changed forever but the markets haven’t caught on to it. There is always a lag between evidence and when there is a fundamental change — and telecom has gone through a fundamental change in the last few months.



Q: Were you surprised at the price at which the Unitech-Telenor deal was struck and the inclination of a lot of players to come in at that kind of a price point?



A: I am not surprised because the financial and the international telecom community continues to view telecom in India through the prism of the last five years and the underlying changes that may have happened. It may have clearly not been manifested, may not be visible to all, so to that extent I am not surprised. I was there I would have done it, but I am not surprised it has happened



Q: You are sounding a bit cynical about prospects, are you saying that the ground rules have changed from the last two-three years?



A: We had an earnings call and I have mentioned that our company has never been stronger. The arbitrage opportunities, the wealth being created on paper, those kind of opportunities are probably gone.



But do not forget that telecom is a huge sector, it is still growing and companies like ours have the potential of becoming strong competitive players and large companies.



Then cycles will come and go like they do for every other sector but I see the big opportunity in terms of positioning your company for durable success not for two years but for ten years and that opportunity is now.



Stock price is affected by number of buyers and number of sellers. So if there are more sellers and buyers, it determines the price. I do not know — I was watching your channel and someone opined that markets will stay in a band and then through in January, we will watch all this.



But we are basically managers. We do what we have to do.

Margins to remain subdued going forward: Idea Cellular

Posted by : My Multibaggers

There is another factor which is to do with accounting because we are building a large number of sites and almost all of these are going on a rental basis — so both expansion and the nature of expansion that hits at the apex level pre- and post-EBDITA is a factor that slightly distorts the percentage margin.



Also, we all live in the same environments, so the GDP growth, per-capita income affects all of us even though I would reckon that telecom-specific issues matter more than the normal environmental issues.



Q: There are now 12 players. Tthere has been a lot of controversy over the 2G spectrum and there is talk for higher charges of 3G spectrum. A year down the line, where do you see the industry? Is it [going to be] fragmented with the couple of internals actually slipping off or do you think it will remain in the holds of two-three stronger parties and the others, at best, will become a sideshow?



A: Our company’s move on spectrum is well-known because they are on record. At some point of time, you just give up but the good news is that companies that are strong have become very large in terms of management processes, in terms of scale. The capacity of policy changes to affect fundamental strength of a company, though, is much less today than what it was five years ago. So the companies which are fundamentally stronger and execute well will come out on talks. So I can’t see whether it will be 12 or 18 or even 24 months but in that time period, some of the questions which were being asked today will no longer be asked. It would be clear who is making the cut and who is not.



Q: Have you already scaled back capex plans though for the next four-six quarters or is that under consideration right now?



A: We have neither scaled back [our capex plans] nor is it under consideration. As I mentioned, we are one of the companies that clearly sees what we should do and we are equipped to do that and time is valuable. So in the search of our strategic objective, we are not going to scale back anything.



Q: Do you see subscriber, rather, pace of subscriber additions slowing down in the next few quarters?



A: At the margin, yes, compared to what it would have been had the economy [been better]. For example, some people said that this Diwali, the pace of subscriber acquisition may have been slightly dented by the surrounding circumstances. It also depends a lot on how the agricultural sector does because more than half of subscribers today come from the rural areas. So it is no longer service-sector specific. But again, the basic growth of telecom because of the need for the product and greater areas under coverage could get dented but the curve will not change dramatically.



Q: What feedback do you get from your investors because we talked to a lot of your investors and sometimes you come away with a feeling that they see you and Bharti very differently saying there is Bharti and then there is Idea. Do you get the sense that people have a very differential view of the performance metrics and expectations from these two companies?



A: That is true. Bharti is Bharti and we are what we are. The danger in comparing two companies is that one company may have made its investments five years ago has therefore got a lead. I give the metaphor of cricket, that if you come in number four, you are not going to catch up with the opener if he is still batting. What you can hope to do is, going forward, match him stroke for stroke.



Bharti is a world-class company but we are here to compete with the very best, we are not looking for concessions.


Cont.....

Margins to remain subdued going forward: Idea Cellular

Posted by : My Multibaggers

Sanjeev Aga, Managing Director, Idea Cellular, said he expected over-capacity leading to the margin pressure over the next few months. "The margin compression last quarter was planned. It may be subdued for sometime."



ARPU, or average revenue per user, has been higher in the current quarter but may taper off in long-term, he said.



According to Aga, the company has not scaled back its capex plan.



Here is a verbatim transcript of Sanjeev Aga`s exlcusive interview on CNBC-TV18. Also watch the accompanying video.



Q: How are the next few months looking? You will have more competitive pressures with the Reliance Communication GSM rollout. Do you think performance in the near term will be subdued because of these competitive pressures?

A: The next few quarters not just the next few months [will be competitive] and we sort of have planned for it. In many ways, what has happened in the sector is that licensing has lost meaning when you have got as many as 12 players. It is effectively an unlicensed sector but a lot of people still are in the mindset of the licence raj.



Q: How do you think this will translate? Do you think your growth volumes will get affected or do you think margins will be down adjusted downward for the whole industry?

A: We are sometimes going to have overcapacity. At times, it does lead to margins getting subdued but sometimes people just back off but at the end of it — and I don’t know whether it’s one year or one-and-a-half or two years — the stronger companies would emerge even stronger, perhaps with greater pricing power. So we do have to go through the period of distinction between the strong and the not-so-strong.



Q: What about a couple of internals for Idea itself? ARPUs were down quite a bit and so were revenues per minute, do you see both of those scaling off over the next few quarters or stabilising at the current level?

A: Our ARPUs were down by 3% but we were the only company who had them up in the previous quarter. If you take a secular view across, say, a one- or two-year period — there is a possibility that it may taper very slightly — but we have the festive season now and even the next quarter, January to March, has good months. I expect there would be a certain amount of buoyancy in these months.



Q: Just to address one other concern that the market has had — there were expectations that because of Hindalco’s high cash needs, there might be some kind of stake sell in Idea. To your knowledge, is that something that is being considered?

A: It does not concern me. I make a very clear distinction between Idea and the shareholders of Idea and I am not aware of any such thing being imminent.
We are doing what we had planned to do a year ago or six to 18 months ago and we think we are stronger than where we were. We will become even stronger in the next few months.



Q: What do you focus on for the moment? Do you just keep on going at your expansion regardless of the competitive scenario or at the cost of profitability just for the next few quarters?

A: You could say that as one of the factors, if you believe something is strategic and that time has a value and if you are equipped in terms of balance sheet to do it, you do not time your strategic moves based on financial markets.
We have the luxury to execute our plan based on what we think is right from the long-term point of view and we will do that.

Expansion is one part of it. There is a huge effort on the service delivery, on the marketing, distribution channels, which is not seen but in terms of management time, that is equally formidable.



Q: Some of the sector leaders have been working with margins close to 40%, yours is between 25%-30%. Do you think these margins are sustainable or will you, during the next couple of quarters, need to adjust downwards quite significantly?

A: Our margins and our profit potential are strong and are second to none. You have to understand telecom is an aggregation of circle markets. So someone would have a completely different set of circles. A company like ours is very strong in some circles — stronger than anyone else. Today, we are leaders in four circles of India and there are only two companies that do better than us. But then there are many other circles that we are starting and there are planned losses. So when you see the total figure and unless you are able to disaggregate it, you can tend to pick up the wrong conclusion. In our case, in the last quarter, we did have a compression in margins, which was planned. We will not have the kind of margins we had two quarters ago for a few more quarters.

Cont.....

Idea Cellular an underperformer: Anagram

Posted by : MMB Messenger

Anagram Research have recommended an underperformer rating on Idea Cellular. Going forward the research firm expects margins to remain under pressure due to new roll out plans.

Idea Cellular an underperformer: Anagram

Posted by : MMB Messenger

Anagram Research have recommended an underperformer rating on Idea Cellular. Going forward the research firm expects margins to remain under pressure due to new roll out plans.