Shares of Reliance Communications surged as much as 4 per cent on Wednesday after India's fourth-largest carrier reported its first profit rise in five quarters. Reliance Communications had reported a profit fall in 14 of the 16 quarters to end-June, mainly hit by higher interest costs.
Shares of Reliance Communications surged as much as 4 per cent on Wednesday after India's fourth-largest carrier reported its first profit rise in five quarters. Reliance Communications had reported a profit fall in 14 of the 16 quarters to end-June, mainly hit by higher interest costs.
As of 09.35 a.m., RCom shares traded 3.4 per cent lower at Rs 133.50 after earlier hitting a high of Rs 134.40.
RCom, controlled by billionaire Anil Ambani, said quarterly net profit surged to Rs 234 crore for its fiscal second quarter ending September 30, excluding the gain from a business restructuring provision write-back, far ahead of analysts' estimates of Rs 146 crore net profit.
Including the write-back, net profit jumped to Rs 675 crore. Operating revenue grew 3.7 per cent from a year earlier to Rs 5,394 crore.
However, key metrices such as average revenue per user and revenue per minute declined, indicating continued headwinds in the highly competitive and price sensitive Indian market. India is home to the world's largest number of mobile phone subscribers after China, but the sector's profitability had been hammered by a price war.
Earlier this year, RCom (and other carriers) raised tariffs for voice calls after a gap of two years.
ARPU declined 7 per cent from previous quarter, RPM fell 5.7 per cent sequentially to Rs 0.434.
The September quarter is usually seen as a seasonally weak quarter for Indian telecoms due to outages and power cuts in monsoon rains.
Reliance Communications recently started distributing Apple Inc's latest iPhones on a two-year contract. Voice calls still account for close to 85 per cent of revenue in the Indian market.
(With inputs from Reuters)
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