On Tuesday, Idea Cellular Ltd. stock closed up 2% in a flat market after better-than-expected results for January to March, announced yesterday, and despite continuing regulatory troubles.
- Pankaj Nangia/Bloomberg News
- Idea Cellular stock closed up 2% in a flat market after better-than-expected results for January to March.
The shares touched 73.95 rupees ($1.64) in morning trade but failed to surpass their one-month high of 74 rupees. Idea shares closed at 73.40 rupees, while the benchmark Sensex closed 0.2% higher.
The mobile phone company, part of the Aditya Birla Group, displayed superior growth in revenue and key operating indicators over its main competitors, Bharti Airtel Ltd. and Reliance Communications Ltd. The company posted a 3% rise in fourth-quarter net profit to 2.75 billion rupees ($61.1 million) from 2.67 billion rupees a year earlier.
But analysts said the continuing regulatory uncertainty surrounding the company—and the telecom industry in general, which has been buffeted by corruption allegations—has been a deterrent for investors.
A government audit report in November last year put the potential loss of revenue to the government from an allegedly rigged spectrum licensing process in 2008 at $40 billion. The federal Central Bureau of Investigation that is investigating the scandal has put the potential losses at $6.7 billion. As a result, telecom regulators are now looking closely at telecom licenses, and whether companies have been following the rules.
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