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Vodafone Idea is expected to face an adverse impact of increased competition and pricing pressure on its financials for the September quarter. Brokerages expect the net loss to be around Rs 570-3,047 crore for the quarter under review.
The company will announce results on November 14, 2018.
Here’s a gist of what brokerages are expecting from the results.
Brokerage: Axis Securities | Net loss: Rs 2,090 crore
Axis Securities expects average revenue per user (ARPU) to be Rs 97. Including Vodafone (for 1 month), we expect revenue of Rs 8,010 crore.
The operating profit could decline due to pricing pressure.
Brokerage: Emkay | Loss: Rs 570 crore
Emkay expects wireless revenue to decline 6 percent QoQ to Rs 5,420 crore, adversely affected by continued competitive intensity and seasonality. Blended ARPU could decline by 3.9 percent QoQ to Rs 96 led by continued pressure on tariffs.
“Data usage continues to grow, driven by increasing acceptance of bundled plans and increased data limits. MoU to grow by 1 percent QoQ, while data usage per subscriber should increase by 15 percent qoq. Subscriber base is expected to remain flat on a QoQ basis. The rise in network opex to dent operating profit,” analysts at the firm wrote in their report.
Brokerage: ICICI Securities | Net loss: Rs 1935 crore
With another round of discounting by Reliance Jio in September 2018 and weakness due to seasonality, the performance of Idea (ex-Vodafone) could deteriorate further.
“We expect ARPU erosion of 5.4 percent QoQ to Rs 95 resulting in revenue (ex-Vodafone) decline of 5.9 percent QoQ to Rs 5540.9 crore (also owing to full impact of divestment of owned towers).
“On account of negative operating leverage due to topline decline, we expect Idea to report EBITDA margin of 8.4 percent (down 280 bps QoQ). The company is expected to post a net loss of Rs 1,935 crore,” the brokerage house wrote in a report.
Brokerage: Motilal Oswal | Net loss: Rs 1,570 crore
It expects consolidated revenue to decline 2 percent QoQ (27 percent YoY) to
Rs 6,010 crore, mainly led by a decline in APRU.
We expect a 6 percent QoQ decline in ARPU to Rs 98, impacted by continued downtrading, it wrote in a report.
EBITDA margin is expected to contract 880bp QoQ to 14.7 percent.
Key monitories
- Consolidated revenue (we expect 2 percent decline QoQ).
- Blended ARPU (we expect Rs 98, 6 percent QoQ drop).
- EBITDA margin (we expect 880 bp contraction QoQ).
Brokerage: Kotak Institutional Equities | Net loss: Rs 3,047.4 crore
The brokerage house said that postpaid re-pricing, continued prepaid ARPU down-trading, seasonality and the initial impact of JioPhone's monsoon hungama result in a higher sequential revenue decline.
“We expect a 5.7 percent like-on-like (Vodafone+Idea, full-quarter pro forma) qoq decline in wireless revenues and 28 percent qoq growth on a reported (Idea + 1 month of Vodafone for 2Q) basis,” the brokerage house said.
Further, it also expects 6 percent qoq EBITDA growth on a reported basis.
Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
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