Giving a subdued opinion on Idea Cellular, Credit Suisse has maintained an underperform rating on the stock with a target price of Rs 70.
The brokerage house believes that EBITDA decline eats up most of the targeted synergies and that Idea has not been a participant of massive growth in the Indian mobile data market.
On its merger with Vodafone, it said that the timeline on merger approvals is critical to prevent further market share and EBITDA erosion. It also highlighted that Vodafone-Idea would have high leverage at 3.8 times.
The company was in the news recently when it declared its results for the September quarter.
The telecom operator reported a consolidated net loss of Rs 1,106.8 crore for the second quarter of the current fiscal. The company had reported a net profit of Rs 91.5 crore in July-September a year ago.
Its revenue from operations dropped 19.72 percent to Rs 7,465.5 crore in the quarter under review, from Rs 9,300.23 crore in the year-ago period.
At 11:41 hrs Idea Cellular was quoting at Rs 93.50, up Rs 0.35, or 0.38 percent, on the BSE. It touched an intraday high of Rs 93.80 and an intraday low of Rs 92.90. – Money Control