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Bharti Q2 net lags forecast, Reliance beats

Posted by Yogesh on Friday, 31 October, 2008

* Bharti net profit up 27 pct, lags forecast on forex loss
* Reliance Comm beats forecast with 17 pct rise in profit
* Companies optimistic of future growth

NEW DELHI, Oct 31 (Reuters) – Leading Indian mobile operator Bharti Airtel posted a smaller-than-expected 27 percent rise in profit as sharp forex losses weighed, but No. 2 Reliance Communications beat forecasts after higher treasury income.

Bharti and Reliance, which both failed to reach a deal to tie up with South Africa’s MTN Group earlier this year, both increased subscriber numbers by about a tenth in the September quarter.

The two companies, which together account for about 42 percent of India’s mobile subscribers, were bullish on their prospects in the world’s fastest-growing wireless market, saying demand should hold up even if overall economic growth slows.

“Customer growth has not been depending on a few towns or a few cities. It is coming from every part of India,” said Akhil Gupta, deputy group CEO of Bharti Enterprises, the mobile operator’s parent. “I am very confident that the coming year will have even better results.”

Asia’s third-largest economy has 315 million mobile users, more than the population of United States, placing it only behind China. In the September quarter 28.5 million signed up.

Just over a quarter of the 1.1 billion population own a mobile and consultancy Gartner forecasts India’s mobile user base will more than double to 737 million by 2012.

Shares in Bharti, India’s third-most valuable firm, rose 5.5 percent to 649 rupees, while Reliance shares jumped 13.8 percent to 220.70 in a Mumbai market which closed over 8 percent higher.


New Delhi-based Bharti, in which southeast Asia’s top phone company SingTel (STEL.SI: Quote, Profile, Research, Stock Buzz) owns more than 30 percent, said net profit rose 27 percent rise to 20.46 billion rupees ($414 million) under U.S. accounting rules in its fiscal second-quarter. [ID:nDEL237049]

It suffered a foreign exchange loss of 5.86 billion rupees in the quarter as it marked its foreign debt to market. The rupee fell 8.4 percent against the dollar in the quarter.

Revenue rose 42 percent to 90.2 billion rupees as Bharti added a record 8.1 million customers, taking its subscriber base to 77.5 million, up 59 percent from a year earlier.

No. 2 firm Reliance Communications said net profit rose 17.3 percent to 15.31 billion rupees, helped by net finance income of 2.35 billion from stock and bond investments and currency gains for foreign subsidiaries.

Revenue rose to 55.35 billion rupees as it added 5.1 million users during the quarter to take its total to more than 56 million.

Analysts polled by Reuters had expected Bharti to report a net profit of 21.25 billion rupees and Reliance to post 14.04 billion.

EBITDA margin, a key gauge of profitability, was at 41 percent for Bharti, compared with 42.8 in the year-ago quarter. Reliance posted an operating margin of 40.8 percent.

Reliance Communications Chairman Anil Ambani said the company would be able to maintain margins even after its GSM expansion. Most of its subscribers are on the CDMA platform, but it is expanding GSM services to cover all of India.

“We aim to maintain our overall profitability,” he told a conference call. Source Reuters


2 Responses to “Bharti Q2 net lags forecast, Reliance beats”

  1. […] Most Read Article. Satyam banned from offshoring work with World Bank: Report · Gold Price since 1972 in dollars per troy ounce · Gold Exchange Traded Funds (ETFs) or gold mutual funds ? SAP staff to go on `forced’ leave … Bharti Q2 net lags forecast, Reliance beats « NaAtMaD – News and … […]

  2. revenue growth in non-voice related services bodes well for india mobile sector in future when 3G becomes reality.

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