Idea Cellular June quarter profit, revenue beat analysts estimates
Net profit rises 57% to Rs728.2 crore from Rs463 crore a year ago; consolidated revenue increases 15.6% to Rs7,561 crore
Mumbai: Idea Cellular Ltd, India’s third largest mobile phone services provider by revenue and market share, beat analysts’ profit and sales estimates for the April-June quarter, led by an increase in voice minutes, and growth in Internet usage and value-added services to 11.5% and 17.8% of service revenue, respectively.
Net profit rose 57% to ₹ 728.2 crore during the quarter ended 30 June from ₹ 463 crore a year ago, the Aditya Birla Group company said on Monday. Consolidated revenue at ₹ 7,561 crore was up 15.6%.
A Bloomberg poll of 21 analysts had pegged net profit at ₹ 618.3 crore and net sales at ₹ 7,337.5 crore. Idea Cellular’s net profit rose 23.5% over the preceding quarter, while revenue was up 7.3%.
On a quarter-on-quarter basis, voice minutes rose 5.2% to 165.2 billion minutes. Minutes of usage (MoU) increased to 401 minutes from 397 minutes in the March quarter. The revenue market share of Idea rose to 16.6%.
“The balanced growth of voice minutes in the quarter point to the significant unmet demand for voice in India," said Himanshu Kapania, managing director and chief executive officer of Idea Cellular.
In the June quarter, Idea Cellular’s average revenue per user (Arpu) increased to ₹ 181 from ₹ 173 in the preceding three months. Idea also reversed the declining average realization per megabyte (ARMB) with a 1 paisa improvement to 26.3 paise in the reporting quarter, compared with 25.3 paise in the March quarter.
Idea’s mobile data consumer base rose by 2.6 million to 27.9 million. This included 10.6 million 3G subscribers. Blended 2G+3G data Arpu improved to ₹ 108 in the quarter, while usage per data subscriber came in at 409 megabyte (MB). This is despite a 21% reduction in overall mobile data tariffs over the last year.
Idea added 3.2 million active users during the quarter. The overall subscriber base of the firm on 30 June stood at 139 million.
While Arpu rose, average realised rate per minute (ARPM) improved 3.3% to 45.1 paise from 43.6 paise. The contribution of value-added services improved to 17.8% of overall service revenue.
Idea’s net debt during the quarter was ₹ 13,976.9 crore, a reduction of ₹ 5,208.7 crore, on the back of additional equity infusion and a cash profit of ₹ 2,023 crore. The net debt to annualized Ebitda ratio now stands at 1.54, providing the company sufficient headroom to participate in the forthcoming spectrum auction.
“Our strong financials in the quarter were aided by 24% dividend contribution from Indus Towers, which added ₹ 244 crore in Ebitda terms and ₹ 79 crore in net profit," chief financial officer Akshaya Moondra said. “Our capital expenditure (capex) guidance will remain unchanged at ₹ 3,500 crore, excluding spectrum investments."
During the quarter, Idea Cellular’s stock fell 3.7%, while Bharti Airtel Ltd rose 5.64%. In the same period, the Reliance Communications Ltd stock rose 13.31% and Tata Teleservices Ltd rose 60.46%.
In the spectrum auction held in February, the telecom operator committed ₹ 10,424 crore for acquiring 65.2 megahertz (MHz) of spectrum. While ₹ 3,143.6 crore has been paid upfront, ₹ 7,280.6 crore has been booked under government-deferred payment liabilities towards the spectrum.
The firm also raised ₹ 3,000 crore in June through a qualified institutional placement. It raised another ₹ 750 crore by issuing 51 million equity shares to Axiata Investments 2 (India) Ltd, a wholly-owned subsidiary of Axiata Group Bhd of Malaysia.
The results were announced after market hours.
On Monday, Idea Cellular shares gained 1.01% to ₹ 139.75 on BSE, while the benchmark Sensex gained 0.29% to 25,715.17 points.
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