Mumbai: Agrowing subscriber base, coupled with investment income and foreign exchange gains, helped Idea Cellular Ltd, the fifth largest cellular company in India, record Rs308.5 crore in first quarter net profit, a 259% rise from the year-ago period.
Idea posted Rs1,477.6 crore in revenue, up 64%. The company said it added 2.12 million subscribers during the quarter ended 30 June, taking its subscriber base to 16.13 million, up by 88.9% from the year-ago period. The mobile operator said its marketshare rose to 15.4% from 14.9% in the quarter ending March. It operates in 11 out of 23 telecom circles.
Investment income and forex gains for the quarter were Rs78.8 crore versus Rs1 crore for the same period last year.
The net profit margin improved to 20.9% in the quarter from 9.5% in the year-ago quarter. However, operating margin went up by only one percentage point, to 34.7% from 33.7%.
Of the improvement in the net margins, Idea got 5.2 percentage points from the jump in foreign exchange gains and investment income; another 3.3 percentage points from savings on depreciation cost and the rest (1.8 percentage points) from savings on finance charges.
“The company has reported better revenue and operating profit than our expectation,” said Hitesh Kuvelkar, associate director, research, First Global Securities, a Mumbai-based brokerage. “The average revenue per user (Arpu) may not have gone down as we had apprehended,” he said. Idea did not disclose its Arpu for the quarter.
The company said its board approved the formation of a wholly owned subsidiary, which will get its mobile network towers.
Idea has already received licences for Mumbai and Bihar circles, and is awaiting spectrum allocation for rolling out services. The firm also set a capital expenditure budget of $2 billion (Rs8,040 crore) for the next two years.
Idea, part of the Aditya Birla group, raised Rs2,500 crore through a public issue of shares at Rs75 per share in February. It also entered into an outsourcing pact with IBM Corp. for 10 years. The pact is valued at $600-800 million.
The Idea Cellular stock on the Bombay Stock Exchange closed at Rs133.40 on Tuesday, up 0.49% from previous closing.