Losses from tumbling R drag Bharti Airtel’s net 25.6%

The company’s net profit at Rs 512 crore was down 25.6 per cent on a sequential basis from Rs 688 crore for the first quarter ended June 2013. The company’s net profit was down 29 per cent from Rs 721.2 crore on a year-on-year basis. It was largely pulled down by a forex loss of Rs 342 crore,against a loss of Rs 534 crore in the preceding quarter. Total revenues at Rs 21,324 crore were up 5.23 per cent on a sequential basis and 10 per cent on a y-o-y basis.

Though operating metrics like average realisation per user (Arpu) and minutes of usage (MoU) were down sequentially,they were better than expectations since the quarter is seen as weak for the operators.

Both the Arpu and MoU were down 4 per cent sequentially at Rs 192 and 437 minutes,respectively. The good part is that despite withdrawing freebies like free minutes in the pre-paid segment,the churn rate was static at 3.2 per cent on a sequential basis. This means that the strategy to revise tariffs by withdrawing free minutes to increase realisations has paid off well.

The Ebitda margin was flat at 32 per cent,compared with the preceding quarter when it was at 32.3 per cent. However,on a yearly basis it showed an improvement over 30.6 per cent during the same quarter last year. The company’s shares closed up 5.23 per cent at Rs 359.05 on the BSE.

“In short,solid operational set of numbers despite the miss at the net income level,” Kotak Institutional Equities said in its report. “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,” it added. fe