Bharti Airtel posts strong growth in December quarter

23 January 2009

Though the launch of rival Reliance Communications' GSM network saw a sharp decline in Bharti Airtel stock, which fell 20 per cent bfore bouncing back with yesterday's sharp rally that drove the stock 6 per cent to Rs620. This came in the wake of results that point to a strong performance by the leading telco in the quarter ended Dec 2008.

The results indicate a strong growth in revenues from the wireless business - up 89 per cent sequentially over the earlier quarter's 5.3 per cent. Steady growth in the wireless segment pushed Bharti Airtel's revenues to Rs9,633 crore for the December 2008 quarter.

The top line performance would have been better than the 6.8 per cent sequential rise had it not been for a sequential decline in enterprise revenues due to a high base effect in the September quarter.

Bharti was able to maintain operating profit margins at 41 per cent thanks to effect cost control measures. The  wireless margins were up more than 100 basis points to 31.4 per cent. The company growth outpaced the industry growth in the December 2008 quarter with the share price rising to 24.7 per cent.

The average revenue per user declined 2 per cent sequentially to Rs324; analysts were expecting a bigger fall.  The expansion of its network also saw the telco move into smaller towns and villages. The minutes of usage (MoU) fell 4 per cent to 505.

The company's DTH venture is well on track and its triple play gameplan of offering voice, data and video services over a common infrastructure and brand is expected to come off well.