Videsh Sanchar Nigam Ltd (VSNL) is expected to post a 60-62 per cent growth in net profit for the year 1997-98. It will announce its results today.
According to analysts tracking the company, this growth will imply that the net profit will be to the tune of Rs 800 crore.
VSNL had registered a net profit of Rs 583 crore in 1996-97.
According to analysts, total income is estimated to record a healthy growth of 23 per cent to around Rs 6,400-6,500 crore, compared to last fiscal's income of Rs 5,201 crore.
The operating profit, according to estimates, would go up by 40 per cent, from Rs 840 crore to around Rs 1,200-1,250 crore. "Thus, VSNL will show a solid 2.2-2.3 per cent growth in operating profit margins," analysts said.
According to them, "The growth in net profit," would be driven by an increase in call volumes and call rates, growth in other income, and a change in formula for the tax rate."
The total revenues -- call volumes and call rates put together -- is expected to have risen by 23-24 per cent.
This is because the basic telephony volumes from international traffic, a major revenue-earner for VSNL, is estimated to have risen by 22-23 per cent.
Secondly, the call rates agreed upon by the Department of Telecommunications (DoT) and VSNL have been changed this year, owing to which, it will receive Rs 10 per call per minute as compared to Rs 9 per call per minute last fiscal.
Since the international calls have registered an increase, the call rates would also go up in proportion.
The tax rate too has undergone a change and the tax outgo will be lower in 1997-98 at 32-32.5 per cent as against last fiscal's figure of 39 per cent.
Income from the Internet services and leased lines business is expected to go up by 3 per cent to 4 per cent due to an enormous rise in subscriptions for Internet access, which have risen nearly by 15-20 per cent as compared to 1996-97.
Other income is also set to increase. Licence fee for this fiscal will be lower than last year, which will again add on to the total income.
