Neutral Idea Cellular, target Rs 109: BofA-ML

BofA-ML maintains a neutral rating on Idea Cellular but slashed its 12-month target price to Rs 109 from Rs 118 earlier. They find data growth to be slightly vulnerable given lower mix of high data ARPU costumers.

The global brokerage firm believes that the top 2 telcos are gaining higher incremental market share at expense of Idea. BofA-ML find risk reward balanced with slower revenue growth, and risks of equity dilution.

The voice tariffs are stable after inching up. Idea is less aggressive in market than before. BofA-ML slashed FY18/19 earnings per share (EPS) estimates by 18%/19% of low-base on back of slower data growth.