Bharti Airtel profit beats expectations despite 77% slump

Bharti Airtel

It had posted net profit of Rs 1,461 crore for the July- September quarter of last fiscal.

For India, Bharti Airtel showed a drop of over 90 per cent in its net profit to Rs 121.1 crore (before exceptional items) for the quarter ended September 30, over Rs 2,095.9 crore in the same period a year ago. Mobile market continues to experience value erosion and financial stress led by competitive pressures.

Consolidated net profit of Bharti Airtel, backed by Southeast Asia's largest telecom company Singapore Telecommunications, stood at 3.43 billion rupees ($53 million), compared with 14.61 billion rupees a year earlier. It was lower than Rs 21,958 crore in the quarter ended June, but analysts said the limited sequential drop - after a sequential rise in the previous quarter - indicated slight easing of pressure in India as Jio raises tariffs gradually.

"This will eventually force operator consolidation and exits as we have witnessed in the recent past".

India's telecom industry is roiled by a price war triggered by the entry of billionaire Mukesh Ambani's wireless venture Jio in September previous year.

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The company further said it had "stepped up" the capex investments during the quarter to support additional data coverage and capacity.

Africa revenues for the quarter stood at Rs 5,203 crore as against Rs 5,272.6 crore in the corresponding quarter previous year.

However, mobile data traffic has grown fourfold to 784 billion MBs in the quarter as compared to 178 billion MBs in the corresponding quarter a year ago. Jio's rivals - forced to slash effective data rates and offer free voice calling on some plans across price segments - have seen a key operational indicator - average revenue per user (ARPU) - crash over the a year ago or so. Jio, which reported its results for the first time earlier this month, reported ARPU of Rs 156.4, now the highest in the industry.

The Africa market fared better with revenue rising 2.8 per cent on an underlying basis, while the operating profit margins improved over 9 per cent year-on-year buoyed by "continuous cost control initiatives". Earlier this month, Bharti agreed to take over the consumer business of smaller rival Tata Teleservices on a debt-free, cash-free basis. Net debt excluding the deferred payment liabilities to the Telecom Department and finance lease obligations increased by Rs 2,554 crore sequentially in the quarter, the company added.

Ahead of earnings, the stock closed at Rs 497.65, up 0.98 percent on the BSE. The second quarter earnings announcement came in after market hours.

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