A man uses a mobile phone outside a Vodafone India Ltd. store in Mumbai, India (Photographer: Dhiraj Singh/Bloomberg)  

Q4 Results: Vodafone Idea’s Loss Narrows, Margin Surges On Merger Benefits

Vodafone Idea Ltd.’s loss narrowed in the quarter ended March as the benefits of merger with Idea Cellular Ltd. started to take effect.

Net loss stood at Rs 4,882 crore in the January-March period compared with Rs 5,005 crore in the previous quarter, India’s largest telecom operator said in an exchange filing. That compares with Rs 4,806 crore analyst estimates compiled by BloombergQuint.

The company achieved 60 percent of its synergy target so far, it said in the filing. Its operating expenses fell owing to realisation of merger synergies.

Its average revenue per user rose 17 percent over the previous quarter to Rs 104, led by exits of low-ARPU generating customers, and gains from bundled offerings to its 4G subscribers.

The company’s exceptional loss, however, rose to Rs 1,146 crore from Rs 801 crore in the December quarter. Vodafone Idea continued to post a net loss owing to a debt burden of nearly Rs 1,23,660 crore and depreciation charges.

On the other hand, rival Bharti Airtel Ltd. reported net profit Rs 107 crore after it adopted a new strategy to maximize its average revenue per user. Reliance Jio Infocomm Ltd.’s efforts to expand its customer base with cheap fares, too, helped it to post Rs 840-crore profit in the March quarter.

Vodafone Idea’s revenue rose 0.1 percent on a sequential basis to Rs 11,775 crore for the January-March period. Analysts had estimated Rs 11,744 crore.

Other highlights:

  • Operating profit rose 57 percent to Rs 1,785 crore—against the Rs 1,362-crore estimate.
  • Operating margin expanded 550 basis points to 15.2 percent.

Shares of Vodafone Idea closed 2.85 percent higher ahead of the earnings announcement. That compares with a 1.16 percent drop in the benchmark NSE Nifty 50.