Company: RCom
Broking House: Angel Broking
Current Price: Rs 173.80
Reliance Communications (RCom) recorded de-growth of 0.7 per cent year-on-year in its topline during Q2FY10. This is attributed to a 7.5% yoy de-growth in its wireless business segment, with a fall of 25.8 per cent yoy in revenues per minute, which stood at Rs 0.47 as on Q2FY10. Its ARPUs, MOUs and RPMs are falling at a faster rate compared to its peers despite strong subscriber additions in the wireless segment. RCom is already highly leveraged, with a substantial debt of Rs 25,466 crore and further raising of assets would weaken the balance sheet. RCom’s stock is trading at a P/E of 11.6x FY11E EPS and with the stock witnessing a sharp correction, the broking house adopts a neutral rating
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