Q1-’11 Results Roundup : Idea Net Income declines severely ; Info Edge Reports 30% jump in Bottom-Line
Indian telecom market is turning into a volume game at least that’s what we can gauge by looking into results of telecom players in several past quarters, where the top line is growing uninterrupted but margins are skewed to a stagnant-decline range. In a similar showcase, Idea Cellular has reported a 22.7 % increase in its Q’1 consolidated revenues which currently stands at Rs. 3650 crores compared to Rs. 2975 crores in a year ago period. Net Income declined severely by 32 % to Rs. 201 crore vs Rs. 291 crore (Y-o-Y).
Note: Idea’s results cannot be directly compared with previous quarter as spice telecom merger is fully realized in this financial quarter.
Idea’s top management has attributed the decline in profitability to fierce industry competition and its adverse impact on the ARR. Average realisation rate (ARR) is the amount realized by an operator on a per minute of call usage. Idea’s average realisation rate this quarter came in at 44paise/minute. The Average revenue per user (ARPU), in usual industry-norm, was down at Rs. 182.
EBITDA Margins witnessed a decline of 4.6 percentage points to 24.3 % Vs 28.9 % in earlier quarter as advertising, network operation & access expenditure grew rapidly. Idea’s total subscriber tally at the end of quarter stands at 68.9 Mn subscribers with net addition of 5.1 Mn.
Idea’s profitably has not severed its capital expenditure programmes and is on its way to spend Rs 4000-4400 crore in current financial year. This is apart from the 3G license fees which it will fork out to get license for 11 circles at total cost of Rs.5769 crores. The percentage of VAS revenues-to-Total revenues stood at 12.6 % against 10.1% in same period last year.
The overly expensive 3G airwaves is going to spell trouble for telecom operators as that will cause imbalance in their servicing debt obligations. The growing pressure on bottom-line will also continue as call rates, despite increase in volume mins, are lowered further and data services continue to become cheaper.
Info Edge Reports 30% jump in Bottom-Line
Info edge has announced a 24.5% increase in revenues to Rs 724 Mn from Rs 619 Mn in the same quarter last year. Net income came in at Rs. 173 Mn Vs 133 Mn registering an increase of 30 percent.
Income from recruitment solutions in this quarter grew 24 percent a commendable feat looking at sluggish growh in overall recruitment market.Ebitda losses for other verticals of info-edge i.e jeevansathi,99acres was down significantly at Rs.44 million. 99acres grew 80 percent this quarter.
The infoedge board is going for restructuring wherein Hitesh Oberoi, current COO will be assigned the position of MD & CEO in place of Sanjeev Bhikchandani. The management is upbeat and expects a pick-up in hiring in coming quarters although the major growth is still expected from IT sector.
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