Bharti Q4 net doubles, stock falls 4.15%

Bharti Airtel Ltd, the country's largest private telecom company, saw net profit rise 98 per cent to Rs 1,353 crore for the fourth quarter ending 31 March, 2007.

Its total revenues of Rs 5,393 crore for the fourth quarter represented growth of over 59 per cent over the corresponding year-ago quarter.

EBITDA (earnings before interest, taxes, depreciation, and amortisation) margins, however, went up marginally to 41.5 per cent, against 40.8 per cent in the year-ago quarter.

Average revenue per user fell by around 5 per cent to Rs 406 this quarter from Rs 427 in the third quarter of 2006-7. However, total minutes of usage per subscriber showed a healthy rising trend, moving to 475 minutes (from 467 minutes in the third quarter).

Akhil Gupta, joint managing director, made it clear that the scope for any improvement in margins was limited.

"With growing competitive pressure and falling tariffs, it is unlikely that margins will go up further. And even if it goes down, I expect economies of scale to take care of the situation."

For the 2006-7 financial year, Airtel's net profit grew 89 per cent to Rs 4,257 crore, against Rs 2,257 crore last year. Total revenue grew 59 per cent to Rs 18,520 crore, against Rs 11,621 crore last year. Cash profit grew by 79 per cent to Rs 7,307 crore, against Rs 4,086 crore last year.

Analysts are divided on whether the quarterly and annual results were in line with expectations, but the market hammered the Bharti Airtel stock, which fell 4.15 per cent to Rs 826.25 from yesterday's close of Rs 862.05.

The fall was much higher than the overall market's, which fell 2.25 per cent, while the drop was less steep for competing telecom stocks like Reliance Communications (down 2.83 per cent) and MTNL (down 1.60 per cent).