New Delhi: India’s sixth biggest mobile phone firm by customers, Idea Cellular Ltd, more than doubled net profits to Rs1,042.30 crore for the year to 31 March, as it increased its customer base by over 70% to 24 million, and said it was ready to expand to new phone service areas in the country.
Revenues for the year ended March rose 53% to Rs6,737 crore, up from Rs4,387 crore reported in the previous year.
In the March quarter, the fourth of fiscal 2008 for Idea Cellular, the firm reported net profits of Rs2,76.7 crore—an expansion of 43.8% over the year-ago period. Revenues in the quarter rose nearly 51% to Rs1,972.4 crore, exceeding expectations of analysts such as Himanshu Shah at Mumbai-based Religare Securities Ltd, who had predicted sales growth of 40%.
“We have been able to achieve this robust growth because of our aggressive network roll-out,” Sanjeev Aga, managing director of Idea Cellular, said on an analysts’ call after the company announced results on Thursday. “During the (March) quarter, we also increased Arpu from Rs279 to Rs287.” Arpu is short for average revenue per user a month.
Shares of Idea Cellular, which announced results towards the end of the day’s trading, closed flat at Rs102.95 each on the Bombay Stock Exchange. Key to future earnings will be “if Idea is able to sustain 3% growth in Arpu and almost 7% jump in minutes of usage during the next few quarters,” said Brijesh Rajavanshi, telecom analyst at Networth Stock Broking Ltd.
Meanwhile, analysts said they expect robust earnings from Bharti Airtel Ltd and Reliance Communications Ltd, or RCom, India’s top two phone firms, which report results on Friday and 30 April, respectively. Anand Rathi Securities Ltd expects Bharti to report Rs1,900 crore net profits for the March quarter, a more than 40% yearly growth.
“We expect Bharti to report a good growth in subscriber numbers apart from a stable Arpu,” said an analyst at a foreign brokerage firm who is not allowed to give media interviews. “We also expect its revenues to grow by around 8% sequentially to over Rs7,700 crore for the March quarter.”
Another analyst who did not wish himself or his firm to be identified said he expects more updates from RCom on the launch of its new GSM-based services. “We expect RCom to report around Rs5,500 crore in revenues and Rs1,400 crore in net profits,” he said.