Vodafone Idea Shares Crack over 25% After Dismal Q1 Earnings
Vodafone Idea Ltd shares cracked over 25% in intraday trade on Monday, i.e. 29 July, after the telecom player reported a weak set of numbers for the first quarter ended June (Q1).
At 10:59 am, shares of Vodafone Idea were trading at Rs 7.05, down 23.7%, on BSE after hitting an intra-day low of Rs 6.85. The stock had ended 4.8% lower in the previous session as well and has corrected by a massive 74% in the last one year.
Vodafone Idea posted net loss of Rs 4,873.9 crore in the June quarter against loss of Rs 4,881.9 crore in the preceding March quarter. The company’s revenue declined to Rs 11,270 crore in the June quarter from Rs 11,775 crore in the previous quarter. Notably, the Vodafone and
Idea merger was completed on 31 August 2018 and, thereby, the numbers of the June quarter are not comparable with those in the year-ago period.
Vodafone Idea attributed the massive losses to the fall in its tariffs and customer churn after the introduction of minimum monthly recharge plans.
At the operating level, however, the company’s earnings before interest, tax, depreciation and amortization (Ebitda) rose to Rs 3,650 crore during the June quarter against Rs 1,785.3 crore in the previous quarter. Margins also improved to 32.4% compared with 15.2% in the March quarter.
Vodafone Idea’s average revenue per user (ARPU) during Q1 inched up 3.8% to Rs 108 against Rs 104 in the previous quarter. However, the company added 4.1 million 4G users in the last quarter.
Vodafone Idea CEO Balesh Sharma said: “We are delivering on our stated strategy, although the benefits are not yet visible in our top line.
As we continue to integrate our networks, our customers’ data experience is significantly improving in most service areas.”
The company is well on track to deliver its synergy targets by the first quarter of FY21, he added.