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Forex Losses Cause Profit Drops For Idea Cellular

Reportedly, the Aditya Birla Group company Idea Cellular had a 32 per cent increase in their net profit for the quarter that ended June 31, 2012 compared to the same period last year. But even though there is an increase compared to the net profit last year, the company reported that they had experienced a drop in net profit on a quarter-on-quarter basis.

Idea Cellular Logo

Idea Cellular

This decrease in performance was due to the Telecom Consumer Protection Regulation that was implemented March 2012. Some other factors include depreciation, tariff wars and forex losses. From April to June quarter, there was about Rs 48 crore depreciation.

Idea officials have said that this problem was due to the impact of currency depreciation that reflected on the interest and finance cost that resulted to forex loss of Rs 24.5 crore. Looking at the numbers, the company is not doing that bad in their business. There are just times that losses are inevitable due to outside factors that companies have no control of.

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