Bharti Airtel gains after Q2 results:26-Oct-2016

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Bharti Airtel surged around 3% to Rs 319.70 on BSE after consolidated net profit fell 4.9% to Rs 1461 crore on 3.4% rise in total revenues to Rs 24652 crore in Q2 September 2016 over Q2 September 2015.

The result was announced after market hours yesterday, 25 October 2016.

Meanwhile, the BSE Sensex was down 207.88 points, or 0.74%, to 27,883.54.

On BSE, so far 1.71 lakh shares were traded in the counter, compared with average daily volume of 3.32 lakh shares in the past one quarter. The stock hit a high of Rs 322.75 and a low of Rs 315.05 so far during the day. The stock hit a 52-week high of Rs 384.90 on 28 April 2016.

The stock hit a 52-week low of Rs 282.30 on 29 January 2016. The stock had underperformed the market over the past 30 days till 25 October 2016, faling 2.93% compared with 0.72% decline in the Sensex. The scrip had also underperformed the market in past one quarter, falling 16.51% as against Sensex’s 0.24% rise.

The large-cap company has equity capital of Rs 1998.70 crore. Face value per share is Rs 5.

Bharti Airtel said the consolidated revenues grew 5.6% to Rs 24652 crore in Q2 September 2016 over Q2 September 2015, on an underlying basis (viz. adjusted for Africa divested operating units and tower assets sale). Consolidated revenue growth was muted by 3.3% on account of full quarter impact of Nigeria currency devaluation.

Bharti Airtel’s consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) rose 14.5% to Rs 9466 crore in Q2 September 2016 over Q2 September 2015. EBITDA margin was reported at 38.4% in Q2 September 2016, higher than 34.7% Q2 September 2015.

Consolidated mobile data revenues grew by 21% to Rs 4536 crore in Q2 September 2016 over Q2 September 2015 on underlying basis.

India revenues grew by 10.1% to Rs 19219 crore in Q2 September 2016 over Q2 September 2015. This was led by healthy growth of 20.9% in Digital TV, 19.2% in Airtel Business, 14.9% in Homes and 7.9% in Mobile (net revenues up 10.3%) on a year-on-year (Y-o-Y) basis.

Mobile Data revenues grew by 23.6% to Rs 3576 crore in Q2 September 2016 over Q2 September 2015, led by increase in the Data customer base by 22.8% and traffic by 54.9%. Mobile Broadband customers increased by 62.2% to 41.30 million from 25.50 million in the corresponding quarter last year. Data average revenues per user (ARPU) has moved up by Rs 8 to Rs 201 in Q2 September 2016 over Q2 September 2015, led by 30.6% increase in usage per customer. Mobile Data revenues now contribute to 24.7% of Mobile India revenues compared with 21.5% in the corresponding quarter last year.

Gopal Vittal, MD and CEO, India & South Asia, said that the overall revenue momentum in India has been sustained during Q2 September 2016 with a growth of 10.1% Y-o-Y. This is primarily due to the strong performance of the company’s non-mobile businesses which grew in aggregate at 18.8% Y-o- Y, albeit the company’s mobile business has experienced a slowdown in growth due to free services being offered by a new operator.

Raghunath Mandava, Chief Operating Officer, Africa, said that underlying Africa revenue growth for the quarter was 4.7% Y-o-Y, backed by the company’s focus on profitable top line growth, led via localized distribution, stronger data networks and our war on waste program.

Customer growth with focus on quality helped garner the highest net adds over the past 4 quarters, with churn remaining stable. With over 23% of our customers now using data, consumption and revenues have grown by 116.8% & 24.9% Y-o-Y respectively. Airtel Money also continues to lead with transaction values growing over 53% Y-o-Y, and base expansion of 15.3% Y-o-Y. As a result, the company’s EBITDA margin has improved by 5.3% Y-o-Y on an underlying basis.

In a separate announcement, Bharti Airtel announced that the board of directors of the company at its meeting held on 25 October 2016, has authorised a committee of directors to evaluate options for monetization of a significant stake in Bharti Infratel, in accordance with applicable regulations.

The final outcome of this exercise will be placed before the board for approval, before any final decision is taken. Bharti Airtel has also requested Bharti Infratel to allow sharing of any information with any prospective buyer, subject to customary confidentiality arrangements. There is no certainty of any transaction until such time the board reviews and approves the final proposal. The announcement was made after market hours
yesterday, 25 October 2016.

Bharti Infratel, India’s leading telecom tower infrastructure provider, is a significant subsidiary of Bharti Airtel. Bharti Airtel has, in the past, divested stakes in Bharti Infratel to a clutch of private equity investors led by Temasek, KKR and other high quality investors in 2008. This was followed by an initial public offering (IPO) in the year 2012 and block sales in the stock market in 2014 and 2015. As on date Airtel holds 71.96% stake in Bharti Infratel.

Bharti Airtel is a leading global telecommunications company with operations in 18 countries across Asia and Africa.

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