Idea Cellular Q1 loss may widen to Rs 750 cr, data volume growth key

Telecom operator Idea Cellular's loss is expected to widen to Rs 750 crore in April-June quarter from Rs 327.7 crore in previous quarter. Earnings will be announced on July 27.

According to average of estimates of analysts polled by CNBC-TV18, revenue is seen falling 0.94 percent sequentially to Rs 8,050 crore in Q1 but the pace of degrowth is likely to moderate after 6-7 percent fall seen in Q3 and Q4FY17.

Operating profit is likely to slip 11.5 percent quarter-on-quarter to Rs 1,945 crore and margin may contract by 290 basis points to 24.1 percent in the quarter ended June 2017.

Key performance indicators

Analysts expect volume growth of 7 percent QoQ at 247.5 billion minutes as the company offered unlimited free voice to retail customers after entry of Reliance Jio. Idea also extra data package.

Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.

Minutes of usage during the quarter may increase 5 percent QoQ to 432 while average revenue per user is seen falling 1.7 percent at Rs 139.5 and revenue per minute may slip 7.3 percent to 24 paisa.

Bharti Airtel's India revenue declined 0.4 percent and operating profit margin down 260 bps at 34.3 percent while volumes increased 10.7 percent in Q1.

Idea Cellular had reported a big beat in Q4 margins improving by 200 bps due to cost savings but in Q1FY18, there might be some give back.

Data volume growth will be closely watched given intense pricing pressure and also watch out for debt reduction.

Idea Cellular shares rallied 28 percent year-to-date, especially after the proposed merger with Vodafone India and clearance from Competition Commission of India to this deal while Bharti Airtel surged 40 percent.