Bharti Airtel, the country's largest private sector telecom company, has come out with second quarter numbers, which are considerably above market expectations. Strong volume growth and efficiency gains through higher economies of scale have helped the company to achieve very strong bottom line growth.
To make it sweeter, the stock rallied more than 4.5 per cent yesterday after the announcement of results. In intra-day trades, total market capitalisation of Bharti crossed the Rs 1,00,000 crore mark – becoming only the 7th Indian company to do so after ONGC, Reliance Industries, Infosys, TCS, Wipro and NTPC. Wipro, at the moment, is not in this league as the stock is currently trading below its lifetime highs set during the tech boom.
For the quarter ended 30 September 2006, Bharti has reported a net profit of Rs 933.8 crore, or Rs 4.93 per share, a growth of 79.27 per cent from Rs 520.9 crore, or Rs 2.79 per share, reported for the previous year quarter. Consolidated revenues increased 60.83 per cent to Rs 4,357.1 crore from Rs 2,709.1 crore.
On a sequential basis net profits have increased 23.67 per cent from Rs 755.1 crore or Rs 3.98 per share reported for the previous quarter ended June 2006 on a revenue growth of 12.98 per cent from Rs 3,856.4 crore.
Operating profits, or EBITDA, increased 66.73 per cent to Rs 1,702.5 crore from Rs 1,021.1 crore for the previous year quarter. Operating margins as a percentage of revenues increased to 39.07 per cent from 37.69 per cent a year ago. For the previous quarter ended June 2006, operating margins were 38.95 per cent.
Cost of services provided, including depreciation, increased 55 per cent over the previous year quarter while selling and general expenses went up by 78 per cent. Total operating expenses went up by 58 per cent over the previous year quarter.
Net interest expenses declined 30 per cent to Rs 58.8 crore from Rs 84.5 crore for the previous year quarter. Other income increased to Rs 32 crore from Rs 13.7 crore. Capital expenditure for the quarter was at Rs 2,744 crore, which may increase in coming quarters as the company expands and upgrades its network further.
Bharti added 4.1 million new subscribers during the quarter and improved its market share to 21.4 per cent in wireless services. As at the end of the quarter, Bharti had slightly more than 27 million GSM mobile and fixed wireless subscribers as compared to 23 million at the end of the previous quarter and 14 million at the end of previous year quarter.
Nearly 85.5 per cent of the GSM subscriber base was prepaid subscribers while post-paid contributed the balance. Average revenues per user (ARPU) for the quarter were Rs 438 per month as compared to Rs 441 during the previous quarter. Revenues from mobile services increased by 73 per cent as compared to the previous year quarter and contributed 76 per cent of total revenues.
Broadband internet and fixed telephone subscribers increased to 1.63 million as at the end of the quarter. ARPU for the quarter in this segment was Rs 1,115 per month. Revenues from this segment increased 43 per cent from previous year quarter and contributed 12 per cent of total revenues.
Enterprise services business, including long distance services to other carriers and services to corporate customers, saw a revenue growth of 45 per cent during the quarter.