Axiata Group  [ PDF ] No clear Idea for 2G AXIATA MK / AXIA.KL  |  OUTPERFORM - Maintained  |  Share Price RM4.99 - Tgt. RM5.79 Telco - Mobile  |  - by Kelvin GOH, CFA

The operations of Idea, Axiata’s associate, are little affected by the recent decision by India’s Supreme Court to quash all the 122 2G licences as the affected circles contribute only 5% to Idea’s revenue. The court has yet to decide on the ramifications of the licence cancellation. We think that this episode has yet to play out fully. The court’s eventual decision should not prevent Axiata from bumping up its dividend payout, which we view as a key rerating catalyst. We maintain our Outperform call and SOP-based target price.