Idea Cellular mobile data usage doubles

Idea Cellular's revenue streams showed healthy growth in the quarter ended September. The company said that earnings from mobile data had started to offset part of the revenue dip incurred by falling average revenues per user and per minute. The company also said it has added 13.1 million more roaming customers in this quarter than it had done in the same quarter last year, despite the fact that this is a quarter that traditionally sees lower volumes in India.

Idea reported healthy growth in revenues and profit after tax compared to the corresponding quarter of the previous year. Consolidated net profit rose to Rs 448 crore from Rs 241 crore in the same quarter a year earlier. Consolidated revenues went up from Rs 5314 crore to 6323.3 crore in the same period. Standalone revenues fell marginally by 3.4 per cent compared to the previous quarter and stood at Rs 5985.3 crore.

Mobile data has emerged as a growth area for the company, Managing Director Himanshu Kapania said at a press conference on Thursday (October 24). Mobile data share grew 8.7 per cent compared to 5.4 per cent in the same quarter last year. Value added services (VAS) contributed 16 per cent to the company's revenues. The total data volume handled through Idea connections has almost doubled to a total of 17.5 billion megabytes, Kapania added.

Analysts maintained that seasonality affects Idea more than other players. Given its higher proportion of rural subscribers and lower mix of revenue from metro circles, Idea is more prone to traffic seasonality as compared to large competitors, Motilal Oswal Securities wrote in an October report. It maintains a "Buy" on Idea on estimates of 22 per cent EBITDA (Earnings Before Interest Tax Depreciation and Amortisation) growth per year.

Idea's revenue share in the first quarter of this year is now higher than that of Reliance Communications and Tata combined, India Infoline wrote in a report. Its FY13 revenue growth was far ahead of the industry's while margins too improved, the report said.

On a consolidated basis, Idea reported revenues of Rs 6323.3 crore, down three per cent from Rs 6538.8 crore in the first quarter of 2013/14. Profits fell from Rs 1826.4 to Rs 1616.5 crore, a fall of 11.4 per cent. The Idea stock closed at Rs 175.20 after a day's high of Rs 179.50. Sachin Gupta of Nomura has a reduce rating on the Idea Cellular stock with a target price of Rs 120.