Idea Cellular falls 8% on second straight quarterly loss

The stock was down 7.5% at Rs 85.40 on BSE as compared to 0.47% rise in Sensex at 12:41 pm.

Shares of Idea Cellular  dipped 8% to Rs 84.65 on BSE in intra-day trade in an otherwise firm market after the company reported its second straight quarterly loss of Rs 326 crore for the quarter ended March 2017 (Q4FY17). The telecom services provider had posted net loss of Rs 386 crore in the December quarter.

Revenue from operations during the quarter under review declined 6.2% at Rs 8,126 crore against Rs 8,662 crore in the previous quarter.

“The Indian wireless industry  witnessed an unprecedented disruption in the second half of the financial year 2016-17 (FY17) on account of free voice & mobile data promotions by the new entrant in the sector,”  Idea Cellular said in a press release.

However, due to focused cost optimization drive and focus gain during the quarter, the company was able to hold its earnings before interest, tax, depreciation and amortization (EBITDA) margin at 27% in Q4FY17, it added.

“The telecom sector has seen sharp reduction in unit economics with voice average revenue per minute (ARPMs) and average revenue per megabyte (ARMBs) falling by ?8% and ?29% respectively for Idea in FY17. The only respite is around 53% growth seen in data usage per subscriber. We believe improvement in ARPMs is critical to alleviate pressure on bottomline which in turn would require pricing discipline by all players. Given the competitive intensity same might take some time to fructify,” analysts at IndiaNivesh Securities said in a result update, maintain ‘hold’ rating on the stock.

At 12:41 pm; the stock was trading 7.5% lower at Rs 85.40 on BSE as compared to 0.47% rise in the S&P BSE Sensex. The trading volumes on the counter more than doubled with a combined 26.7 million shares changed hands on BSE and NSE so far.