Consolidated revenue grew 1.8% q-o-q to Rs 2,730 crore (our estimate: Rs 2,750 crore), led by a 2.1% increase in rental revenue and a 1.3% increase in energy and other reimbursements.
Ebitda margin improved 133 bps q-o-q to 41.3%, led by cost declines including one-offs. PAT increased 48% q-o-q to Rs 410 crore (our estimate: Rs 353 crore) due to higher reported Ebitda and other income.
Roll-out intensity increased q-o-q, with co-location additions growing from 1,959 in Q2FY14 to 3,373 in Q3FY14. Towers/co-locations grew 0.4/2.1% q-o-q. Average sharing factor grew from 1.93 in Q2FY14 to 1.96 in Q3FY14.
While BHIN is well positioned, with one of the top-3 GSM incumbents as anchor tenant across its portfolio, network rollout intensity remains low. We are upgrading our Ebitda estimates by 1-2%. The stock trades at 19.1x FY15E EPS and at an EV of 6.1x FY15E Ebitda. We are rolling forward our valuations to December 2014. Maintain ‘neutral’ with a revised target price of Rs 180 (Rs 56 earlier), based on SOTP/DCF.