Idea Cellular shares fall 6% after disappointing March quarter

Shares of Idea Cellular fell nearly 9 per cent intraday after country's third largest telecom company's net profit declined by 39 per cent to Rs 575.6 crore in the last quarter of 2015-16 due to a spike in finance costs.

The stock hit an intraday low of Rs 115.45, down 8.77 per cent on the Bombay Stock Exchange (BSE).The scrip settled the day 6.51 per cent lower.

Voice traffic growth of 9 per cent year-on-year and data traffic growth of 51 per cent year-on-year, both missed estimates, according to CLSA.

Idea, along with Bharti Airtel and Vodafone's India unit have been heavily spending on ramping up 4G networks in anticipation of Reliance Industries' 4G telecom service launch later this year.

CLSA estimates Idea will still have to spend $2 billion for 3G/4G coverage, which will further add to interest costs and debt, and increase net debt to EBITDA ratio to 3.4x in fiscal year 2017.

(With inputs from Reuters)