Will Idea Cellular 's Q2 ring in alarm bells?

Country’s third largest cellular major Idea Cellular will come out with its quarterly earnings today post market hours. This would be the first time the cellular major would be posting its results since the commercial roll out of Reliance Jio. Idea is expected to post a weak set of numbers in Q2 with profitability dropping sequentially.

According, to street estimates revenues are expected to come down on a quarterly basis. This is a seasonally weak quarter for Idea as it has a higher percentage of rural subscribers which results in a greater impact of negative seasonality.

Cost pressure would be closely watched given the hyper competition being witnessed in the telecom sector post Jio launch. Realisations figure would be an important barometer to judge company’s performance and its future growth prospects.

Management commentary would be eyed in terms of reorganising telecom infra and sale of tower with an aim to unlock value and at the same time reduce debt.

Ahead of its Q2, shares of Idea Cellular are trading down more than three per cent at Rs 77.45 on NSE.