Telecom major Bharti Airtel's consolidated net profit fell 12.7 percent to Rs 1255 crore in Q4. Naveen Kulkarni, Co-Head – Research, PhillipCapital says that while the company’s African business is a disappointment, the company has logged decent margins.
Below is the edited transcript of the interview.Q: We are just trying to glean through a lot of numbers. What is your initial assessment of how the earnings look?A: From a perspective of how India does business, it looks fairly okay. The overall consolidated numbers do look a little weaker. That is primarily to do with the Africa numbers. Revenues look a little weaker on a consolidated basis because we were expecting around 2 percent higher than what they have reported. Earnings also were expected to be a little higher than this.Q: Are you disappointed by India’s wireless revenues because that has only gone up by 1.9 percent. Would that be a fairly bleak performance by wireless revenues?
A: That number is also lower. There is an impact of mobile termination rate-cut. Even if we were to look at Idea’s performance where they have managed to grow India’s revenues by around 5.1 percent on a sequential basis and 19 percent on year on year basis, even then the numbers don’t look very encouraging.
Q: How will the street read these numbers because on one hand we have got revenues that look lackluster? On the other hand, margins have positively surprised India’s wireless, even on the consolidated basis.A: From a market perspective, there could be some bit of correction in the stock, but overall, we were expecting not so strong numbers in this quarter. Market was already building in for a weaker set of numbers for Africa. So, overall the margins are a slight breather but not so encouraging.Q: So would you cut your estimates on Bharti Airtel post these earnings?A: We will have to do the detailed earnings because there are quite a few numbers which we have to model. Once we have the detailed update, then probably, we will able to share a better picture on this.
Q: We are just trying to glean through a lot of numbers. What is your initial assessment of how the earnings look? A: From a perspective of how India does business, it looks fairly okay. The overall consolidated numbers do look a little weaker. That is primarily to do with the Africa numbers. Revenues look a little weaker on a consolidated basis because we were expecting around 2 percent higher than what they have reported. Earnings also were expected to be a little higher than this. Q: Are you disappointed by India’s wireless revenues because that has only gone up by 1.9 percent. Would that be a fairly bleak performance by wireless revenues? A: That number is also lower. There is an impact of mobile termination rate-cut. Even if we were to look at Idea’s performance where they have managed to grow India’s revenues by around 5.1 percent on a sequential basis and 19 percent on year on year basis, even then the numbers don’t look very encouraging.
Q: How will the street read these numbers because on one hand we have got revenues that look lackluster? On the other hand, margins have positively surprised India’s wireless, even on the consolidated basis. A: From a market perspective, there could be some bit of correction in the stock, but overall, we were expecting not so strong numbers in this quarter. Market was already building in for a weaker set of numbers for Africa. So, overall the margins are a slight breather but not so encouraging. Q: So would you cut your estimates on Bharti Airtel post these earnings? A: We will have to do the detailed earnings because there are quite a few numbers which we have to model. Once we have the detailed update, then probably, we will able to share a better picture on this.
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