Shares of Idea Cellular plunged 4.3 per cent to Rs 55.90, lowest since July 26, as the company had on Monday reported a drop in quarterly revenue, hurt by an aggressive pricing war, although a one-time gain helped it post a surprise profit.
Idea Cellular has posted a net profit of Rs509 crore on a standalone basis for the first quarter ended June 30, compared with a net loss of Rs 617 crore in the same period a year ago. The company’s revenue fell 27.9 per cent to Rs 5,889 crore from Rs 8,167 crore in the same quarter of last financial year.
Jefferies has cut the price target, citing muted Q1 results. “Idea's weaker balance sheet and integration woes would limit its ability to effectively compete with peers on high ARPU data subscribers. We expect it to lose revenue market share,’’ it says.
Of 25 brokerages covering the stock, 7 rate it “buy” or higher, 6 “hold” and 12 “sell” or lower; their median price target is Rs 73, according to Thomson Reuters data. The stock had fallen 46 per cent this year, as of last close.
(With inputs from Reuters)