Idea Cellular dips post Q2 results

Ideal Cellular has dipped 6% to Rs 143 on the BSE in otherwise firm market after the company’s July-September quarter (Q2) consolidated revenues slid 1.2% quarter-on-quarter (QoQ) to Rs 8,690 crore led by a fall in voice pricing and voice minutes of use due to an increasing rural subscriber base and seasonal effects.

Earnings before interest, tax, depreciation and amortization (EBITDA) margins declined 150bps QoQ to 35.2%. Net profit too declined 13.1% sequentially at Rs 809 crore, but it's better than analyst expectation of Rs 787 crore.

Rumit Dugar & Saumya Shrivastava, analysts at Religare Institutional Research cuts price target to Rs 150 from Rs 190 earlier.

“We stay cautious on the sector and Idea given rising capex, voice cannibalisation and the entry of R-Jio. We note that data growth is moderating and data price points need to drop further to drive up adoption. We largely maintain our below-consensus revenue/EBITDA estimates, but adjust our higher debt and interest capitalization,” analyst said in a report dated October 23, 2015.

At 11:00 am, the stock was down 5.4% at Rs 143 on the BSE. A combined 6.99 million shares changed hands on the counter on the BSE and NSE.

IDEA Cellular Limited