Bharti Airtel Q1 net falls 24% to Rs 762 cr QoQ

India's largest telecom operator Bharti Airtel disappointed the street by reporting lower-than-expected numbers in the quarter ended June 2012. Consolidated net profit fell by 24.23% quarter-on-quarter to Rs 762.2 crore while analysts on an average had expected it in the vicinity of Rs 1,075 crore. However, net sales rose just 3.3% to Rs 19,350.1 crore from Rs 18,729.4 crore during the same period, which was almost in-line with forecast of Rs 19,530 crore.

Earnings before interest, tax, depreciation and amortisation (EBITDA) too dropped 6% QoQ to Rs 5,849 crore as against the expectations of Rs 6,525 crore. EBITDA margin, which went down by 310 basis points QoQ to 30.2%, was way below the estimates of around 33.4%.

While explaining the reason for weak performance in the quarter, the company said adverse regulatory and tax developments had impacted operating profits. Foreign research firm Nomura said both India and Africa's EBITDA were lower than the estimates and the firm does not see major improvement in Bharti's domestic business any time soon.

In India, average revenue per user (ARPU) declined to Rs 185 as against Rs 189 while minutes of usage (MOU) increased to 433 as against 431 QoQ. Both came in slightly lower than forecast of Rs 187 and 436, respectively.

Bharti has reported a forex gain of Rs 160 crore in the April-June quarter of financial year 2012-13.

Africa

Its African division has posted a net loss at Rs 669 crore, which also impacted consolidated numbers of the company.

Revenues (in dollar terms) went down by 0.4% QoQ to USD 1,066 million from USD 1,071 million, which was quite lower than expectations of 3% growth.

EBITDA dropped by 7.72% to USD 275 million from USD 298 million and EBITDA margin fell by 200 basis points to 25.8% as against 27.8% during the same period.

In early trade, the stock fell more than 3.5% to Rs 285 amid huge volumes on the BSE.