Bharti Q2 profit up 13% at Rs 2,321 cr

Last Updated: Friday, October 30, 2009 - 16:00

Zeenews Bureau

Mumbai: In line with the expectations, telecom major Bharti Airtel posted 13 percent jump in its September quarter net profit at Rs 2,321 cr (USD 495 million). The Indian telecom major’s net sales rose 9 percent for the same quarter to Rs 9,846 cr from Rs 9,020 cr.

The Q2 earning per share (EPS) of the company was put at Rs 5.93 against Rs 6.97.
The company`s earnings before interest, tax, depreciation and ammortisation (EBITDA) margin improved to 42.1 percent during Q2, against 41 percent in the same quarter a year ago.

The EBITDA, a benchmark of profitability, was at Rs 4,142 crore in the second quarter, up by 12 percent over the same period last year.

However, the average revenue per user (ARPU) has come down by 9 percent. As a result of low call rates and cut throat competition in the telecom sector.

The telecom major saw more than a quarter fall in its shares in last few weeks.

With competition hotting up and many telcos offering Rs 40 paise tariffs, the company saw a 24 percent drop in
average revenue per user in Q2 to Rs 252 with 52 percent of the new additions coming from the low-paying rural subscribers.

Average minutes of usage fell an annual 15 percent to 450 minutes. Average rate per minute also fell 15 percent annually.

New telcos like Telenor, Etisalat are starting operation by December this year which would add to the already existing pressure, forcing companions like Bharti to drastically drop call charges and that would impact margins severely, said analysts.
The company added 82.44 lakh customers during Q2, taking its market share in the wireless subscriber base to 23.5 percent.

"Bharti continues to maintain the market leadership in the mobile segment, despite stiff competition," Bharti Airtel CMD Sunil Mittal said.

The Sunil Bharti Mittal-led company was trying to expand in the African continent through its deal with South African telecom major MTN but the deal’s failure resulted in the fall in the company’s shares.
Southeast Asia’a telecom major Singtel owns more than 30 percent stake in the company.

Shares of Bharti Airtel were trading at Rs 315.05 on BSE in morning trade, up 0.96 percent over the previous close.

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First Published: Friday, October 30, 2009 - 16:00

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