The country’s largest private telecom operator, Bharti Airtel, reported a 27 per cent increase in second quarter net profit driven by robust growth in volumes as well as increasing returns from non-voice services.
The company’s consolidated net profit (US GAAP) grew to Rs 2,046 crore, but fell slightly short of market expectations. It had posted a profit of Rs 1,614 crore in the corresponding quarter last financial year.
According to some analysts’ estimates, Bharti was expected to post a net profit of Rs 2,150 crore.
During the quarter under review, Airtel reported its highest addition in customer base at over 8.2 million (almost touched the 80-million subscriber mark this quarter), which resulted in a 42 per cent year-on-year growth in revenues. Total revenues rose to Rs 9,020 crore as against Rs 6,337 in the year-ago period.
The company’s stock price rose 5.52 per cent to close at Rs 649 on the Bombay Stock Exchange today.
However, the company’s results were marred by a forex loss of Rs 586 crore due to a weaker rupee. “We hedge significant portions of our business, therefore the forex losses that you see are notional,” said Akhil Gupta, deputy group CEO and managing director of Bharti Enterprises.
Meanwhile, the average revenue per user (ARPU) for the company fell to Rs 331 from Rs 350 in the trailing quarter due to deeper penetration into the rural markets. However, the minutes of usage per user per month also decreased to 526 minutes (534 in the trailing quarter) during the quarter.
“APRUs need to take the seasonality factor into consideration. There is a seasonal decline in the first and second quarter traditionally, while the third and fourth quarters are more successful. Also with more penetration in the rural markets, a bit of drainage is bound to happen,” said Sanjay Kapoor, president, mobile division, Bharti Airtel
“This has been a very good quarter in terms of free cash flow. However, if 3G comes then free cash flow might be hit for that quarter, given the investments we have to make,” Gupta said. Bharti’s EBIDTA margins declined to 41 per cent as against 42.8 per cent last year.
Bharti’s share of mobile business revenue dropped to 30.2 per cent compared with 41 per cent last year as the company hived off its infrastructure arm last year.
Gupta said there were no immediate plans to give dividend to its shareholders. “There is so much of capex going forward and with the 3G auction coming, it is the wrong time to talk about dividends,” he added.
