Idea Cellular

1QFY2011 Result Update | Telecom
July 26, 2010

Idea Cellular REDUCE
CMP Rs68
Performance Highlights Target Price Rs58
Parameter (Rs cr) 1QFY11 4QFY10 %chg (qoq) 1QFY10 %chg (yoy) Investment Period 12 Months
Net Revenues 3,654 2,976 22.8 3,348 9.1
EBIDTA Margins (%) 24.3 28.9 (4.6) 27.6 (3.3) Stock Info
PAT 201 297 (32.2) 267 (24.5) Sector Telecom
Source: Company, Angel Research Market Cap (Rs cr) 22,326
Beta 0.75
Strong top-line performance, however margin erosion continues: For 1QFY2011,
52 Week High / Low 84.9/47.1
Idea Cellular witnessed an impressive broad-based growth of 22.8% yoy (9.1%
qoq) in its consolidated top-line, which was ahead of our and consensus estimates. Avg. Daily Volume 1485520

The mobile business revenues grew by 21.4% yoy (10.3% qoq) on account of Face Value (Rs) 10
robust improvement in total Minutes of Usage (MoUs), which were up by 69% yoy BSE Sensex 18,020
(20.5% qoq) to 82,274 minutes. The total subscriber base (including Spice) moved Nifty 5,419
up by 8% qoq to 68.9mn in 1QFY2011. The national long distance (NLD) business Reuters Code IDEA.BO
grew by 104.3% yoy (6.1% qoq), while the passive infrastructure business grew by Bloomberg Code IDEA@IN
26.8% yoy (7.8% qoq). At the EBIDTA level, margins witnessed strong erosion of
458bp yoy (327bp qoq) owing to the higher than expected increase in operational
Shareholding Pattern (%)
costs. However, the tax rate fell from 9.5% in 4QFY2010 to 3.5% in 1QFY2011.
Promoters 47.0
Thus, mainly on account of lower operational profitability, bottom-line declined by
MF / Banks / Indian Fls 9.6
32.2% yoy (24.5% qoq including one-time other income in 4QFY2010). Excluding
one-time income in 4QFY2010, profit was down by 32.2% yoy (6.2% qoq). FII / NRIs / OCBs 40.1
Indian Public / Others 3.3
Outlook and Valuation: We expect Idea to record 22% CAGR in top-line over
FY2010-12E, aided by continued strong subscriber additions, value added services
revenues and higher revenues from 3G roll outs. However, intense competitive Abs. (%) 3m 1yr 3yr
pressures are expected to restrict the bottom-line CAGR to 4.6% over the period. At Sensex 1.5 17.2 14.2
the CMP, the stock is trading at fair valuations of 21.4x FY2012E EPS. Hence, we Idea Cellular 4.0 (15.3) (48.5)
recommend a Reduce on the stock, with a Target Price of Rs58, implying a forward
P/E of 12x for its core business’s FY2012E EPS of Rs3.2 and Rs20 per share for its
16% stake in Indus Towers.

Key Financials (Consolidated)
Y/E March (Rs cr) FY2009 FY2010 FY2011E FY2012E
Net Sales 10,154 12,447 15,464 18,608
% chg 51.1 22.6 24.2 20.3
Net Profit 882 954 811 1,045
% chg (15.4) 8.2 (15.0) 28.9
FDEPS (Rs) 2.7 2.9 2.5 3.2
EBITDA Margin (%) 27.9 27.4 23.4 23.0
P/E (x) 25.3 23.4 27.5 21.4
P/BV (x) 1.5 1.9 1.8 1.6
RoE (%) 6.4 8.0 6.4 7.6
RoCE (%) 6.4 7.2 5.8 7.4 Vibha Salvi
EV/Sales (x) 2.3 2.3 2.0 1.6 022 – 4040 3800 Ext: 329
EV/EBITDA (x) 8.2 8.3 8.4 7.1 vibhas.salvi@angeltrade.com
Source: Company, Angel Research

Please refer to important disclosures at the end of this report 1

Idea Cellular | 1Q FY2011Result Update

Exhibit 1: 1QFY2011 Performance (Consolidated)
Y/E March (Rs cr) FY2011 FY2010 % chg FY2010 % chg FY2010 FY2009 % chg
1Q 1Q (yoy) 4Q (qoq)
Net revenues 3,654 2,976 22.8 3,348 9.1 12,447 10,154 22.6
Operating expenditure 2,765 2,116 30.7 2,424 14.1 9,040 7,318 23.5
EBITDA 888 860 3.3 923 (3.8) 3,407 2,836 20.1
Other income - - 52 - 84 - -
Interest charges (Net) 114 87 31.3 114 0.1 401 495 (19.0)
Depreciation & Amortisation 566 456 24.2 567 (0.2) 2,015 1,403 43.6
Income before taxes 209 317 (34.3) 295 (29.2) 1,075 939 14.5
Tax 7 20 28 121 58 111.0
Net income 201 297 (32.2) 267 (24.5) 954 882 8.2
Diluted EPS (Rs) 0.6 1.0 (36.5) 0.9 (28.2) 2.9 2.7 7.4
EBITDA margin (%) 24.3 28.9 27.6 27.4 27.9 22.6
Net profit margin (%) 5.5 10.0 8.0 7.7 8.7
Mobile ARPUs (Rs/user/month) 182 232 (21.6) 185 (1.6) 214 267 (19.8)

Exhibit 2: 1QFY2011 – Actual v/s Angel estimates
(Rs cr) Estimates Actual Variation (%)
Net revenue 3,497 3,654 4.5
EBIT margin (%) 26.8 24.3 (2.5)
PAT 248 201 (18.9)

Strong top-line growth aided by higher MoUs and subcriber additions

For 1QFY2011, Idea Cellular registered an impressive broad-based growth of
22.8% yoy (9.1% qoq) in consolidated top-line, which was ahead of our and
consensus estimates. The mobile business reported revenue growth of 21.4% yoy
(10.3% qoq). However, normalised revenue of the segment grew 5.4% qoq taking
into consideration the full quarter impact of the revenues from Spice
Communications compared to the one-month revenue of the company included in
4QFY2010, as the amalgamation took place with effect from March 1, 2010. The
growth in mobile business was driven by robust improvement in the Total Minutes
of Usage (MoUs), which surged 69% yoy (20.5% qoq) to 82,274 minutes. The
total subscriber base (including Spice) moved up 8% qoq to 68.9mn in
1QFY2011. However, on account of the hyper-competitive market conditions the
average realised rate (ARR) during the quarter stood lower by 6.4%, a decline to
44 paise per minute.

The NLD business grew by 104.3% yoy (6.1% qoq) during the quarter, while the
passive infrastructure business recorded 26.8% yoy (7.8% qoq) growth.

July 26, 2010 2


Exhibit 3: Total MoUs - Growth trend
(Mn minutes)
65,000
55,000
45,000 CQGR 13.7%

35,000
25,000
15,000
5,000

4QFY07

1QFY08

2QFY08

3QFY08

4QFY08

1QFY09

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

High operational costs exert pressure on margins

Idea’s consolidated EBIDTA margins witnessed strong erosion of 458bp yoy (327bp
qoq) during the quarter. The network operating costs, license charges and roaming
and access charges shot up by 258bp, 29bp and 159bp qoq respectively, during
the quarter.

Idea standalone continued to witness EBIDTA losses in its new service areas for the
fourth consecutive quarter. The quantum of loss was however lower at Rs140cr in
1QFY2011 compared to Rs142cr in 4QFY2010. Thus, though the EBIDTA margins
of the company’s established circles continued to bleed by 460bp yoy (280bp qoq),
the reduction in EBIDTA losses in new areas coupled with continuous sequential
improvement in Indus margins restricted further margin erosion during the quarter.

Lower operational profitability impacted bottom-line

Idea witnessed a slight 0.1% qoq increase in interest cost, which was mainly due to
forex fluctuation. However, the company capitalised interest cost of Rs40.4cr
against payment for 3G auction fee and thus it did not impact the bottom-line
during the quarter. However, depreciation cost increased by 24.2% yoy (down 0.2%
qoq), while the tax rate fell from 9.5% in 4QFY2010 to 3.5% in 1QFY2011.

During 4QFY2010, Idea had recorded a one-time income of Rs51.9cr due to the
write-back of provisioning for the lease rentals with respect to the service areas of
Spice. Including this one-time income, bottom-line came in lower by 32.2% yoy
(24.5% qoq). Excluding the one-time income, bottom-line fell by 32.2% yoy (6.2%
qoq).

July 26, 2010 3


Exhibit 4: Segment-wise gross revenue break-up
1QFY11 1QFY10 4QFY10 % chg % chg
Particulars (Rs cr) yoy qoq
Mobility 3,654 3,010 3,312 21.4 10.3
National Long Distance 440 216 415 104.3 6.1
Passive Infra Services 279 220 259 26.8 7.8
Other Operating Income - 1 -
Total Gross Revenues 4,373 3,446 3,986 26.9 9.7
Less: Inter-segment
eliminations 719 470 638 52.9 12.7
Total 3,654 2,976 3,348 22.8 9.1

Exhibit 5: Mobility business – Operating metrics (including Spice)
1QFY11 1QFY10 4QFY10 % chg % chg
Particulars (Rs cr) yoy qoq
Revenues (Rs cr) 3,654 2,976 3,348 22.8 9.1
Mobile subscriber base (Mn) 68.9 42.8 63.8 61.0 8.0
Mobile ARPUs (Rs/month) 182 232 185 (21.6) (1.6)
Total minutes of usage (Mn) 82,274 48,729 68,275 68.8 20.5
Minutes of use/user/month 415 399 398 4.0 4.3
Revenues per minute (Rs) 0.44 0.58 0.47 (24.1) (6.4)
EBITDA (Rs cr) 888 860 923 3.3 (3.8)
EBITDA Margins (%) 24.3 28.9 27.6 (4.6) (3.3)
EBITDA/minute (Rs) 0.11 0.18 0.14 (38.8) (20.2)
Source: Company, Angel Research; Note: These metrics are for the 22 service areas including those
of Spice Communication

July 26, 2010 4


Exhibit 6: Revenue, EBITDA and EBITDA margin break-up
% chg % chg
(Rs cr) 1QFY11 1QFY10 4QFY10
yoy qoq
Revenues
Established circles - 11 3,383 2,746 3,025 23.2 11.8
Newer circles - 9
306 143 276 114.6 10.9
Idea Standalone - 20 service areas* 3,690 2,888 3,301 27.7 11.8
Proportionate - Spice (2 Circles)
- 136 98 (100.0) (100.0)
Proportionate - Indus
255 199 234 28.3 9.4
Inter-segment eliminations
291 247 285 17.9 2.1
Idea Consolidated - 20 service
areas* 3,654 2,976 3,348 22.8 9.1
EBITDA
Established circles - 11 934 835 975 11.9 (4.2)
Newer circles - 9
(140) (64) (142) 117.5 (1.5)
Idea Standalone - 20 service areas* 794 770 833 3.1 (4.7)
Proportionate – Spice (2 Circles)
- 29 7 - -
Proportionate - Indus
95 61 84 56.5 13.4
areas* 888 860 923 3.3 (3.8)
EBITDA Margins (%)
Established circles - 11 27.6 30.4 32.2 (2.8) (4.6)
Newer circles - 9 (45.7) (45.1) (51.5) (0.6) 5.8
Idea Standalone - 20 service areas* 21.5 26.7 25.2 (5.2) (3.7)
Proportionate – Spice (2 Circles)
- 21.6 7.3 (21.6) (7.3)
Proportionate - Indus 37.1 30.4 35.8 6.7 1.3
areas* 24.3 28.9 27.6 (4.6) (3.3)
Source: Company, Angel Research; Note: (i) As on 1QFY2011 new service areas include Mumbai,
Bihar, Orissa, Tamil Nadu, J&K, Kolkata, W Bengal, Assam and North East; (ii) For 1QFY2011,
Idea standalone covers 22 service areas including Punjab and Karnataka circles of Spice, whereas
for 1QFY2010 and 4QFY2010 the Idea standalone statistics exclude Spice numbers as the
amalgamation was effective from March’10.

July 26, 2010 5


Investment Arguments

Hyper competition looms over the industry; survival of the fittest

We believe that the status of Indian telecom sector would continue to remain
challenging if the operations continue at lower tariffs to combat hyper-competition
- currently on an average there are 10-12 telecom operators per circle in India
compared to 4-5 in the developed markets of US and Europe. TRAI is still
resolving the 2G related issues, while the MNP is still not implemented. Thus, we
believe that consolidation would be the right way ahead for the industry, and the
telecom service providers (TSP) with strong market positioning and healthy
financials would sustain the blows better than smaller ones, discarding unhealthy
competition and promoting steady growth of the sector.

Continuous fall in tariffs and 3G funding to erode profitability

Though Idea witnessed a 24.1% yoy decline in Revenue per minute (RPM) from 58
paise per minute in 4QFY10 to 44 paise per minute in 1QFY2011, it managed to
bring down the cost per minute from 44 paise to 35 paise during the period. If
tariffs fall from current levels of 44 paise per minute, it would be difficult for
management to sustain below 35 paise cost per minute going forward. Taking this
into consideration and with increased opex on account of higher investments on
technology and network to remain competitive, higher debt and capex for the 3G
roll out resulting in higher interest and depreciation costs would erode the
company’s profitability for at least an year.

No clarity on 3G roll-out due to regulatory issues

We believe that the inflow from 3G roll out would be a reliever to the current pain
that the Indian telecom industry is going through. However, the roll out is expected
to happen from December’10 onwards with no clarity on the exact date of the roll
out. The funds raised for the 3G roll outs would result in higher interest and
depreciation costs, which would be charged to the books once the roll out begins.

Outlook and Valuation

We expect Idea to record 22% CAGR in top-line over FY2010-12E, aided by
continued strong subscriber additions, value added services revenues and higher
revenues from 3G roll outs. However, intense competitive pressures are expected
to restrict bottom-line CAGR to 4.6% over the period. We believe that the
competitive landscape would witness some consolidation and stability from
FY2012E onwards. At the CMP, the stock is trading at fair valuations of 21.4x
FY2012E EPS. Hence, we recommend a Reduce on the stock, with a Target Price
of Rs58, implying a forward P/E of 12x for its core business’s FY2012E EPS of
Rs3.2 and Rs20 per share for its 16% stake in Indus Towers.

July 26, 2010 6


Exhibit 7: Key Assumptions
Parameter (%) FY2011E FY2012E
Subscriber growth 28.5 16.0
Monthly ARPUs (15.0) (2.0)
EBIDTA margin 23.4 23.0
Tax rate 10.8 18.0
EPS growth (15.0) 28.9

Exhibit 8: Change in estimates
FY2011E FY2012E
Earlier Revised Earlier Revised
Var (%) Var (%)
Estimates Estimates Estimates Estimates
Net Revenues 14,557 15,464 6.2 16,510 18,608 12.7
EBIDTA
23.2 23.4 0.2 23.7 23.0 (0.7)
(margins)
Other Income 51 39 (24.1) 66 56 (15.5)
PBT 673 909 35.1 991 1,274 28.6
Tax 121 98 (19.0) 178 229 28.6
PAT 551 811 47.0 812 1,045 28.6

We have revised upwards our FY2011E and FY2012E top-line estimates, based on
the robust 15-20% sequential growth in MoUs being witnessed by the company
since the past few quarters on the back of increased subscriber additions and wins
in new circles. These, we believe, will drive better than expected growth on top-
line. We expect the strong top-line growth to take care of strong erosion in EBIDTA
as expected earlier. The lower tax rate in 1QFY2011 would lower the effective tax
rate to 11% from earlier expected 18% in FY2011. However, the tax rate for
FY2012E is expected to remain at 18%. Thus, we have upgraded our PAT
estimates for FY2011E and FY2012E by 47% and 29% respectively and Target
Price from Rs50 earlier to Rs58.

Exhibit 9: One-year forward P/E band

30000
25x
25000
20x
20000
Share Price (Rs)

15000 15x

10000 10x

5000

0
Jul-05

Jul-06

Jul-07

Jul-08

Jul-09
Jan-06

Jan-07

Jan-08

Jan-09

Jan-10
Apr-05

Apr-06

Apr-07

Apr-08

Apr-09

Apr-10
Oct-05

Oct-06

Oct-07

Oct-08

Oct-09


July 26, 2010 7


Exhibit 10: Recommendation Summary
Company Reco. CMP Tgt Price Upside FY2012E FY2012E FY2010-12E FY2012E FY2012E
(Rs) (Rs) (%) P/BV (x) P/E (x) EPS CAGR (%) RoCE (%) RoE (%)
Bharti Airtel Accumulate 320 360 12.4 2.1 12.9 1.9 18.6 17.9
Idea Cellular Reduce 68 58 (14.3) 1.6 21.4 4.6 7.4 7.6
RCOM Sell 188 155 (17.6) 0.9 11.0 (10.9) 4.7 8.1

July 26, 2010 8


Profit & Loss Statement (Consolidated)
Y/E March (Rs cr) FY2007 FY2008 FY2009 FY2010 FY2011E FY2012E
Gross sales 4,366 6,720 10,154 12,447 15,464 18,608
Less: Excise duty - - - - - -
Net Sales 4,366 6,720 10,154 12,447 15,464 18,608
Other operating
- - - - - -
income
Total operating income 4,366 6,720 10,154 12,447 15,464 18,608
% chg 53.9 51.1 22.6 24.2 20.3
Total Expenditure 2,901 4,468 7,318 9,040 11,840 14,321
Cost of Services 1,720 2,866 5,091 6,304 8,407 10,209
SGA 921 1,256 1,703 2,090 2,660 3,256
Personnel 261 346 525 645 773 856
Other - - - - - -
EBITDA 1,465 2,252 2,836 3,407 3,624 4,286
% chg 53.7 26.0 20.1 6.4 18.3
(% of Net Sales) 33.6 33.5 27.9 27.4 23.4 23.0
Depreciation&
672 877 1,403 2,015 2,280 2,418
Amortisation
EBIT 793 1,375 1,434 1,392 1,344 1,868
% chg 73.3 4.3 (2.9) (3.5) 39.0
(% of Net Sales) 18.2 20.5 14.1 11.2 8.7 10.0
Interest & other
305 278 495 401 474 650
Charges
Other Income 21 17 - 84 39 56
(% of PBT) 4.1 1.6 - 7.8 4.3 4.4
Share in profit of
- - - - - -
Associates
Recurring PBT 509 1,115 939 1,075 909 1,274
% chg 118.9 (15.8) 14.5 (15.5) 40.2
Extraordinary
- - - - -
Expense/(Inc.)
PBT (reported) 509 1,115 939 1,075 909 1,274
Tax 7 73 58 121 98 229
(% of PBT) 1.4 6.5 6.1 11.3 10.8 18.0
PAT (reported) 502 1,042 882 954 811 1,045
Add: Share of earnings
- - - - - -
of associate
Less: Minority interest
- - - - - -
(MI)
Prior period items - - - - - -
PAT after MI (reported) 502 1,042 882 954 811 1,045
ADJ. PAT 502 1,042 882 954 811 1,045
% chg 107.6 (15.4) 8.2 (15.0) 28.9
(% of Net Sales) 11.5 15.5 8.7 7.7 5.2 5.6
Basic EPS (Rs) 1.9 4.0 2.8 2.9 2.5 3.2
Fully Diluted EPS (Rs) 1.5 3.2 2.7 2.9 2.5 3.2
% chg 0.0 107.6 (15.4) 8.2 (15.0) 28.9

July 26, 2010 9


Balance Sheet (Consolidated)
Y/E March (Rs cr) FY2007 FY2008 FY2009 FY2010E FY2011E FY2012E
SOURCES OF FUNDS
Equity Share Capital 2,593 2,635 3,100 3,300 3,300 3,300
Preference Capital - - 2 2 2 2
Reserves& Surplus (413) 909 10,727 8,574 9,385 10,430
Shareholders Funds 2,180 3,545 13,829 11,876 12,687 13,732
Minority Interest - - - - - -
Total Loans 4,251 6,515 8,917 7,859 11,197 12,125
Deferred Tax Liability 1 66 92 214 - -
Total Liabilities 6,431 10,126 22,837 19,950 23,884 25,857
APPLICATION OF
FUNDS
Gross Block 7,047 11,014 21,147 27,059 31,457 35,004
Less: Acc. Depreciation 2,631 3,124 5,998 8,891 11,171 13,589
Net Block 4,417 7,890 15,149 18,168 20,286 21,415
Capital Work-in-
507 1,037 1,495 547 547 547
Progress
Goodwill (Incl. net
1,192 1,795 2,246 6 6 6
intangibles)
Investments 1 - - - - -
Current Assets 2,466 2,106 3,403 726 2,514 3,358
Cash 1,820 1,053 5,132 1,420 2,514 3,358
Loans & Advances 400 774 (1,729) - - -
Other 246 278 - (695) - -
Current liabilities 2,152 2,702 - - - -
Net Current Assets 314 (596) 3,403 726 2,514 3,358
Mis. Exp. not written off - - 544 504 531 531
Total Assets 6,431 10,126 22,837 19,950 23,884 25,857

July 26, 2010 10


Cash Flow Statement (Consolidated)
Y/E March (Rs cr) FY2007 FY2008 FY2009 FY2010E FY2011E FY2012E
Profit before tax 509 1,115 939 1,075 909 1,274
Depreciation 672 877 1,403 2,015 2,280 2,418
Change in Working
- 222 (413) (695) 695 (120)
Capital
Less: Other income 21 (327) (444) 84 39 56
Direct taxes paid 7 19 108 121 93 229
Cash Flow from
1,153 2,522 2,264 2,190 3,747 3,287
Operations
(Inc)./ Dec in Fixed
- (5,558) (6,749) (4,077) (4,398) (3,547)
Assets
(Inc)./ Dec. in
- (512) (3,425) - - -
Investments
(Inc)./ Dec. in loans
- - - 1,115 (1,533) 349
and advances
Other income 21 92 151 84 39 56
Cash Flow from
21 (5,977) (10,023) (2,878) (5,892) (3,143)
Investing
Issue of Equity 319 9,369 200 0 -
Inc./(Dec.) in loans 2,265 1,597 (1,057) 3,338 928
Dividend Paid (Incl.
- 452 763 121 98 229
Tax)
Others - - 146 - - -
Cash Flow from
- 2,132 10,348 (979) 3,240 699
Financing
Inc./(Dec.) in Cash 1,132 (1,323) 2,589 (1,666) 1,094 843
Opening Cash
149 1,820 497 3,086 1,420 2,514
balances
Closing Cash
1,820 497 3,086 1,420 2,514 3,358
balances

July 26, 2010 11


Key Ratios
Y/E March FY2007 FY2008 FY2009 FY2010E FY2011E FY2012E
Valuation Ratio (x)
P/E (on FDEPS) 44.5 21.4 25.3 23.4 27.5 21.4
P/CEPS 14.9 9.3 9.2 7.5 7.2 6.4
P/BV 8.0 5.0 1.5 1.9 1.8 1.6
Dividend yield (%) 0.0 0.0 0.0 0.0 0.0 0.0
EV/Sales 4.5 3.3 2.3 2.3 2.0 1.6
EV/EBITDA 13.3 9.9 8.2 8.3 8.4 7.1
EV / Total Assets 2.3 1.7 1.0 1.5 1.3 1.2
Per Share Data (Rs)
EPS (Basic) 1.9 4.0 2.8 2.9 2.5 3.2
EPS (fully diluted) 1.5 3.2 2.7 2.9 2.5 3.2
Cash EPS 4.5 7.3 7.4 9.0 9.4 10.5
DPS 0.0 - - - - -
Book Value 8.4 13.5 44.6 36.0 38.4 41.6
Dupont Analysis
EBIT margin 18.7 20.7 14.1 11.9 8.9 10.3
Tax retention ratio 98.6 93.5 93.9 88.7 89.2 82.0
Asset turnover (x) 0.6 0.6 0.6 0.7 0.7 0.8
ROIC (Post-tax) 11.9 11.1 7.8 7.3 5.9 7.2
Cost of Debt (Post Tax) 7.1 1.2 1.5 1.1 1.1 1.1
Leverage (x) 1.1 2.8 1.1 0.8 1.2 1.3
Operating ROE 17.3 38.3 14.6 12.3 11.9 15.2
Returns (%)
ROCE (Pre-tax) 12.3 13.6 6.4 7.2 5.8 7.4
Angel ROIC (Pre-tax) 20.5 9.9 7.3 6.3 7.7
ROE 23.0 29.4 6.4 8.0 6.4 7.6
Turnover ratios (x)
Asset Turnover (Gross
0.6 0.6 0.5 0.5 0.5 0.6
Block)
Inventory / Sales (days) 5 5 2 - - -
Receivables (days) 127 11 9 10 11 13
Payables (days) 203 144 133 132 108 102
Working capital cycle
(125) (128) (122) (121) (97) (89)
(ex-cash) (days)
Solvency ratios (x)
Net debt to equity 1.1 1.5 0.3 0.5 0.7 0.6
Net debt to EBITDA 1.7 2.4 1.3 1.9 2.4 2.0
Interest Coverage (EBIT /
2.6 5.0 2.9 3.5 2.8 2.9
Interest)

July 26, 2010 12


Research Team Tel: 022 - 4040 3800 E-mail: research@angeltrade.com Website: www.angeltrade.com

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responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify,
nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While
Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory,
compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.

Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or
other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in
the past.

Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in
connection with the use of this information.

Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please
refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and
its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement Idea Cellular
1. Analyst ownership of the stock No
2. Angel and its Group companies ownership of the stock Yes
3. Angel and its Group companies' Directors ownership of the stock No
4. Broking relationship with company covered No

Note: We have not considered any Exposure below Rs 1 lakh for Angel, its Group companies and Directors.

Ratings (Returns) : Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
Reduce (-5% to 15%) Sell (< -15%)

July 26, 2010 13

Idea Cellular

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