Telecom operator Idea Cellular's July-September quarter (Q2FY17) is likely to be weak as profit is expected to fall sharply by 40 per cent successively to Rs 130 crore.
According to average of estimates of analysts, revenue is also seen decreasing 1.3 per cent to Rs 9,360 crore on sequential basis. This is a seasonally feeble quarter for Idea as it has an elevated percentage of rural subscribers which results in a greater impact of negative seasonality.
Idea share price opened at Rs. 78.10 against its previous close of Rs. 80.
EBITDA (earnings before interest, tax, depreciation and amortization) in Q2 is seen to dip 2.4 per cent to Rs 3,000 crore and margin may minimize 40 basis points to 32 per cent compared with previous quarter. Analysts feel that higher churn and pricing pressure can put stress on margin. Lower voice realization is also expected to affect earnings as Idea in its Q2 con-call said it would reduce voice realizations to drive volumes.
At 9:40 AM, Idea share price is trading at Rs. 78.25 with the decline of 2% against 0.06% rise in the Benchmark Index Nifty.
Meanwhile, media reports suggest that Kumar Mangalam Birla is likely to restructure telecom infra and tower business with an aim to unlock value. Idea share price gained 7 per cent during the week gone by. Regardless of that it is still the worst performing stock in 2016 with a cut of 45 per cent as augmented competition, lower scale and higher leverage for Idea is a concern for shareholders.
Idea is picked among the top 500 performing stocks for the quarter from among 1700 stocks as identified by Dynamic Levels. This means Idea has strong fundamentals and is safe for investment. For the levels of support and resistance, visit Idea share price forecast page of Dynamic Levels website.
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