The good news in Bharti Airtel’s 29% profit fall Investors seem happy with the 15.1% increase in Ebitda during the September quarter. Bharti Airtel Ltd reported a year-on-year decline in net profit for the 15th successive quarter. Consolidated net profit fell 29% to Rs.512 crore on the back of a sharp jump in provisioning for taxes and finance costs. But investors are content with the 15.1% increase in earnings before interest, tax, depreciation and amortization (Ebitda). Bharti’s shares rose 3.8% in early trading on Wednesday, making it the top gainer among Nifty stocks. Bharti’s Ebitda margin has risen by 144 basis points on a year-on-year basis, thanks largely to a 284 basis points jump in margins of the India wireless business. On a sequential basis, India wireless revenues fell 2.1%, owing to a 2.7% drop in the total number of voice minutes carried on the company’s network. This isn’t surprising, especially after Idea reported a 6% decline in volumes last week. The July-September quarter is a seasonally weak one for the telecom industry, besides which telcos have been trying to reduce the number of free minutes provided to customers. Investors will be pleased to note the near 1% improvement in revenue per minute, on the back of a 4% increase seen in the June quarter. Mobile data revenues continued to grow at a brisk pace—they grew around 18% sequentially during the last quarter and accounted for over 7% of consolidated revenue. The steady increase in realizations led to a 106 basis points sequential increase in Ebitda margin. Bharti’s enterprise business grew at a healthy pace, with Ebitda growing 17.3% sequentially. And the Africa business, which has struggled in the past, reported a decent 5.4% increase in revenues in dollar terms and a 6.2% increase in Ebitda sequentially. Thanks to the rupee deprecation, the international business, including the South Asia business, reported a 20% sequential jump in Ebitda. Of course, on a year-on-year basis, growth in the African business continues to be sluggish at 2.7% (in constant currency). Last quarter’s results included a one-off licence fee levy of Rs.87 crore and a jump in withholding taxes in the international business, which points to the risks involved with the African acquisition. In fact, this has been one of the reasons Bharti shares have underperformed those of Idea Cellular Ltd in recent years. In that backdrop, the company’s better-than-expected September quarter results provide some respite.
Posted on: Wed, 30 Oct 2013 06:34:14 +0000
Trending Topics
Recently Viewed Topics
© 2015