Idea tanks 7.5% due to poor quarterly result

While the major benchmark indices are struggling to stay above previous day's high, shares of Idea slipped more than 7.5 per cent on Monday morning, reacting to the reported net loss of Rs 383.88 crore for the 9MFY17 against Rs 659.35 crore YoY.

The companies net sales declined 3.79 per cent YoY to Rs 8,662.72 crore for the quarter, against Rs 9,004.18 crore. Reacting to the result, the shares of Idea Cellular lost more than 7.5 per cent to make a low of Rs 102 on Monday.

The company owed this bad result to the disruption created by the new entrant in the sector and its offer of free services. Reportedly, debt of the company also saw a surge of Rs 49,138.2 crore in Q3FY17, compared to Rs 36,401.3 crore QoQ. The company was forced to reduce the tariffs of its voice as well as data, due to the competition created by the new entrant Reliance Jio. The company also lost as much as 5.5 million customers on sequential quarter basis.

The bourses have witnessed a stellar run-up in the stock, moving up by more than 45 per cent in last two weeks, post the merger news with Vodafone. This probably gave reasons to the traders to book profit on Monday. However, market will still keep an eye on further development in the light of the tie-up with Vodafone, as the merger may turn out to be a very profitable move for the company.