Technically, Idea (CMP:175) has good support of around 171 and it has to break & sustain over 180 for an immediate target of 185-190. Consecutive closing above 180, it may target 195 & 200-205 in the short to medium term. In the long term, only sustaining above 205, Idea might target 245-250 (FY:16-18) under the bullish market scenario
On the down side, sustain below 171, it may fall to 166-164 area immediately. Consecutive closing below 164, it may further fall to 158-153-148-143-135-128-125 zone in the near term under worst bear case scenario.
Bottom Line: Technical Trading Levels (Positional)
| SL</>2 | FROM SLR | |||||||||
| IDEA | CMP | 175 | ||||||||
| T1 | T2 | T3 | T4 | T5 | T6 | T7 | SLR | |||
| Strong > | 174 | 180* | 185 | 190 | 195 | 200 | 205 | 210 | <171 | |
| Weak < | 171 | 166-164* | 158 | 153 | 148 | 143 | 135 | 128-125 | >174 | |
Q4 result & other parameters of Idea was above street estimates. But the stock movement is somehow lackluster for the last few weeks, perhaps market is guessing the effect of R-JIO (4-G) on overall mobile data market in the coming quarters.
As par reports, to counter 4-G of R-JIO, Idea is now focusing more on 3-G and is planning for a capex of around Rs.5000 cr in FY-16 & it will also in the process of launching of 4-G on pilot project basis in selected pockets within Dec-2015 itself and may launch the same in full throttle by FY-16.
Idea has also substantial pricing power, being projected itself as a premium mobile data provider with 24/7 good network connectivity equipped with all types of data plans & pricing. It recently hiked mobile data rates up to by 100% in Delhi/NCR (quite expensive there 3G @755 for 3GB).
Idea being the 3-rd largest mobile telecom company in India and backed by a financially strong & well respected Birla group, might be one of the strong player apart from Vodafone, Airtel, Tata to counter the expected aggression in telecom/mobile data space by R-JIO in the coming days.
As par quick BG metrics, current median valuation of Idea may be around 165 and its projected fair value might be around 200-240-300 (FY:16-18) under the current market parameters.
| SCRIP | EPS(TTM) | BV(Act) | P/E(AVG) | LONG TERM | SHORT TERM | MEDIAN VALUE | 200-DEMA | 10-DEMA |
| IDEA | 9.03 | 46.7 | 17 | 159.54 | 163.21 | 161.38 | 165.81 | 173.53 |
| IDEA | 13.55 | 52.05 | 17 | 195.43 | 199.93 | 197.68 | 165.81 | 173.53 |
| IDEA | 20.35 | 58.05 | 17 | 239.50 | 245.02 | 242.26 | 165.81 | 173.53 |
| IDEA | 30.55 | 64.75 | 17 | 293.45 | 300.20 | 296.83 | 165.81 | 173.53 |
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