Idea Cellular Q4 loss may widen to Rs 765 cr but volume seen up 8%

Telecom operator Idea Cellular is expected to post loss at Rs 765 crore for January-March quarter against loss of Rs 383.9 crore in previous quarter due to pricing pressure and lower revenues. Increase in depreciation and interest cost (as company recognised some spectrum bought in October 2016) may also impact bottomline.

According to average of estimates of analysts polled by CNBC-TV18, revenue is seen falling 6.1 percent sequentially to Rs 8,135 crore in the quarter ended March 2017.

Idea's revenue is expected to decline for the third consecutive quarter while the company is likely to post a loss for the second straight quarter.

Overall fourth quarter is expected to be as bad as Q3, given it was second consecutive quarter of Jio offering free services. Its peer Bharti Airtel's India revenue also declined 6.25 percent QoQ.

Compared to Bharti Airtel, Idea positioning is weaker considering 100 percent of its revenue comes from the domestic market.

Operating profit during the quarter is likely to fall nearly 17 percent to Rs 1,801 crore and margin may contract by 286 basis points to 22.14 percent compared with December quarter despite cost rationalisation. Margin have been falling from levels of 36.7 percent in Q1FY16.

Volume is seen rising 8.2 percent sequentially to 227 billion minutes while minutes of usage is likely to rise 2.1 percent to 393.

Average revenue per user may fall 9.5 percent quarter-on-quarter to Rs 142 from Rs 157 and voice revenue per minute may be at 26.4 paise against 29.6 paise on sequential basis.

The stock surged 22 percent in 2017 due to its merger with Vodafone.