Idea Cellular Ltd. may also go down the same path as the country's largest telecom services provider Bharti Airtel Ltd., and witness a decline in revenue for the first time since its listing in 2007, if estimates by brokerages are anything to go by.
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Revenue is likely to fall 1.2 percent to Rs 8,892 crore for the third quarter of financial year 2016-17, according to Bloomberg consensus estimates.
The third largest telecom operator in India is also expected to report a loss of Rs 407 crore for the first time since listing. Idea Cellular's profit has been declining for the last four quarters.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) is estimated at Rs 2,386 crore versus Rs 3,129 crore on a year-on-year basis.
Most brokerages attribute the bottomline pressure to rival Reliance Jio Infocomm Ltd.'s free services, the cash crunch and rising finance cost. Though Reliance Jio had launched free services on September 5, 2016, the full impact is expected to be felt only in the third quarter. Pricing pressure is expected to continue in the fourth quarter with Reliance Jio's Happy New Year offer, which is valid till March 31, 2017.
Idea Cellular will announce its third quarter earning numbers on February 11.
The stock has run up 40 percent since the announcement of a possible merger between the company and Vodafone India. Though brokerages consider the merger to be a positive move for the company, none of the analysts have changed their rating on the stock.
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