Telecom operator Idea Cellular's July-September quarter is expected to be weak as profit is likely to fall sharply by 40 percent sequentially to Rs 130 crore.
According to average of estimates of analysts polled by CNBC-TV18, revenue is also seen declining 1.3 percent to Rs 9,360 crore on sequential basis.
This is a seasonally weak quarter for Idea as it has a higher percentage of rural subscribers which results in a greater impact of negative seasonality.
EBITDA (earnings before interest, tax, depreciation and amortisation) in Q2 is likely to dip 2.4 percent to Rs 3,000 crore and margin may shrink 40 basis points to 32 percent compared with previous quarter.
Higher churn and pricing pressure can put pressure on margin, feel analysts.
Lower voice realisation is also likely to impact earnings as Idea in its Q2 concall said it would lower voice realisations to drive volumes.
Meanwhile, media reports suggest that Kumar Mangalam Birla is likely to reorganise telecom infra and tower business with an aim to unlock value.
The stock gained 7 percent during the week gone by. Despite that it is still the worst performing stock in 2016 with a cut of 45 percent as increased competition, lower scale and higher leverage for Idea is a concern for shareholders.
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