Bharti's Q3 posts record growth
Sunil Mittal's Airtel reports a 123 pc growth in net profit for the third quarter at Rs 1,215 cr, reports M Rajendran.india Updated: Jan 23, 2007 21:22 IST
Sunil Mittal's Bharti Airtel whopped market expectations with a thumping growth in quarterly profit figures on Tuesday, powered by a record addition of mobile service subscribers in a hot growth economy.
Bharti reported a 123 per cent growth in net profit for the third quarter ended December at Rs 1,215 crore, while consolidated revenues jumped 62 per cent to Rs 4,913 crore, compared with the same quarter of the previous year.
The profit figure was well above the Rs 1,074 crore predicted in a Reuters poll of analysts, and its shares rose 3.6 per cent, making it India's third most valued company in the market after ONGC and Reliance.
"Demand for telecom services continues to be robust across all segments, led by a buoyant economy. In particular, the wireless segment has seen record additions and we believe that this trend is likely to continue," Chairman Sunil Mittal said in a statement.
The company announced its highest ever-net addition of 50.19 lakh (5.02 million) customers in a single quarter, taking its overall customer count to 3.37 crore, up 92 per cent over the previous year's third quarter.
It maintained its leadership position through an improved market share of all India mobile subscribers at 21.8 per cent as on December 31, 2006. India has about 14.7 crore mobile subscribers.
More subscribers helped growth, though the average revenues per user (ARPU) have been steadily declining, down to Rs 427 at the end of December from Rs 470 a year earlier.
"Bharti's performance has beaten the market expectation and is expected to continue in future. In fact, under The US GAAP (accounting) the performance is 20 per cent better then the Indian GAAP. Since penetration level in India is still very low there is huge space for growth.
And more importantly, once these companies reach close to saturation in term of customer base, they will start focusing on giving valued added services to increase the ARPU," said Sanjay Kaul at FE Securities.
"The falling ARPU's are not a major concern till the revenues are growing. The revenues have been constantly increasing which gives us a positive signal," Akhil Gupta, Bharti's chief financial officer, told Hindustan Times.
The earning before interest, tax, depreciation and amortisation (EBITDA) for the company during the quarter was Rs 2,005 crore, a growth of 79 per cent on the year.
The revenues and net profit for the nine months ended December 31, 2006 was Rs13, 126 crore and Rs 2,904 crore, a growth of 59 per cent and 84 per cent respectively, over the same period last year.
Bharti said it also plans to launch the Direct To Home (DTH) services to address the fast growing home entertainment segment through its wholly owned subsidiary, Bhatia Telemeter Limited.
Bharti announced acquisition of a submarine network cable system from Network i2i (jointly owned by Singtel and a Bharti group company) by way of purchase of all the assets or equity for an overall consideration of $ 110 million, subject to approvals.
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