Idea Cellular Q1 profit seen down 4% to Rs 905 cr: Poll

Telecom operator Idea Cellular is expected to register a 3.9 percent sequential degrowth in first quarter profit at Rs 905 crore due to increase in amortisation and interest cost, according to a CNBC-TV18 poll. Expenses related to 3G launch in Delhi in March 2015 and 1/3rd auction spectrum payment may hurt the bottomline.

Analysts expect some slowdown in growth due to one offs. Revenue is seen rising 2.9 percent (15 percent year-on-year) to Rs 8,663 crore in the quarter ended June from Rs 8,422.5 crore in March quarter.

This growth rate is slower than around 20 percent year-on-year growth seen in the past. Revenue may be impacted by mobile termination rate (MTR) cuts, increase in service tax and reduction in roaming tariff ceilings.

Operating profit may increase 3.6 percent quarter-on-quarter to Rs 3,175 crore and margin may expand 25 basis points to 36.65 percent.

Key performance indicators

Revenue per minute may fall 1.8 percent sequentially to 44 paise and average revenue per user (ARPU) may slip marginally to Rs 178.5 from Rs 179.

The poll expects volume growth of 4.6 percent at 193.5 billion minutes in June quarter compared to 185 billion minutes in March quarter. Minutes of usage (minute per subscriber) may rise 0.6 percent to 402.5 in the quarter gone by.

Analysts see voice revenue per minute (RPM) falling by around 4 percent sequentially due to one offs like MTR cut, roaming cuts etc. They believe management’s capex guidance of Rs 5,500 crore is conservative.

According to them, data revenue momentum may sustain. Data volumes have grown around 100 percent for the past 6 quarters.