Bharti Airtel on Wednesday reported a 29 per cent decline in its net profit to Rs 512 crore during the second quarter ended September 30 compared with Rs 721 crore during the same period last year.
Hit by weak rupee
The company said margins were hit due to continued depreciation of the rupee with forex restatement and derivative losses of Rs 342 crore against Rs 25 crore loss last year. This is the 15th consecutive quarter when Bharti Airtel has reported declining profit.
However, good operating performance seems to indicate that the company is set for a turnaround. The consolidated revenues grew 10 per cent to Rs 21,324 crore. Mobile Internet revenues generated income of Rs 1,503 crore, up more than 100 per cent from the corresponding quarter last year. Number of 3G users has doubled to just over eight million subscribers.
Revenues were also enhanced by growth of 28.8 per cent in Digital TV and 20.8 per cent in Airtel business (B2B). International revenues grew by 17.9 per cent with Africa increasing by 16.1 per cent while South Asia rose 54.4 per cent.
Ankita Somani, Research Analyst -Telecom, Angel Broking, said, “Consistent improvement on operational parameters, good growth in data services and signs of growth picking up in Africa are likely to drive the company’s business growth in the upcoming quarters as well.”
Bharti Airtel’s share price was up 5.23 per cent to Rs 359.05 at close on the BSE on Wednesday.
ARPU rises
Steady increase in tariffs helped the company improve its average revenue per user by 8 per cent to Rs 192 from Rs 177. Realisation per minute for voice calls has improved by 4 per cent at 36.74 paise. But despite the increase in tariff voice usage per customer has gone up from 417 minutes to 437 minutes.
The company has gained due to declining competition levels as a number of new 2G operators were forced to shut shown post the Supreme Court ruling on the 2G spectrum scam. The company’s consolidated net debt has reduced to $9,697 million resulting in the net debt to EBITDA ratio (USD terms) improving to 2.18 times compared to 2.59 times at the end of the same quarter last year.
“Operationally, both India and Africa wireless businesses surprised positively – India on margins and Africa on revenue growth. Even as we need sustenance of good performance in Africa to change our view there, the quarter provided ample data points to support out positive view on the India wireless business,” said a report from Kotak Institutional Equities.