Shares of Bharti Airtel rose over 5 percent as investors cheered better than expected March quarter numbers for the telecom major.
Its shares touched a high of Rs 419.40 on the BSE against its previous close of Rs 406.10.
The company on Tuesday reported a profit of Rs 83 crore for the March quarter against analysts’ estimates of a loss by the firm. The profit has dipped by 78 per cent against Rs 373 crore that the firm reported during the same quarter last year. In the previous quarter, it had reported a profit of Rs 306 crore, implying a dip of 72 per cent.
The company's revenue fell over 3 per cent at Rs 19,634 crore against Rs 20,318 crore in the previous quarter. On a YoY basis, the revenue has seen a fall of over 10 percent.
At an operating level, the EBITDA fell 7 percent (down 12 per cent year-on-year) at Rs 7,034 crore against Rs 7,587 crore QoQ, while the operating margin came in at 35.8 per cent, down from 37.3 per cent QoQ. The margin was reported at 36.4 per cent in Q4 of FY17.
Its India revenues were reported 13 per cent lower YoY at Rs 14,796 crore, while the India EBITDA is reported at Rs 5,237.2 crore, down 22 per cent YoY. The operating margin is reported at 35.4 per cent, down 390 basis points year-on-year.
“The telecom industry continues to witness below cost, artificially suppressed pricing. Industry revenues were further adversely impacted this quarter due to the reduction in International termination rates...Our strategic investments in data capacities, innovative digital content through Airtel TV, customer friendly bundles and upgrade programs led to the highest ever mobile data customer additions of 15 Mn during the quarter. Usage parameters remained robust– on a YoY basis, we saw data and voice traffic grow 584% and 55% respectively," Gopal Vittal, MD and CEO, India & South Asia, said in a statement.
Brokerage: Credit Suisse | Rating: Maintain Neutral | Target: Rs 440
The brokerage house said that while EBITDA pressure continues, it is seeing signs of end of easy cost cuts in most segments. It observed that capex stayed high in India, while Africa capex restarted after four quarters. Further, it believes that some form of capital infusion could be needed soon. Heightened competition is also leading to pressure on ARPU/EBITDA, it added.
Brokerage: CLSA | Rating: Retain Buy | Target: Cut to Rs 590
CLSA said that its Q4 Cons EBITDA was ahead of estimates. It lowered FY19-21 Revenue & EBITDA Forecasts By 8-15%. It expects the firm to deliver 14 percent CAGR in consolidated EBITDA.
Brokerage: Deutsche Bank | Rating: Buy | Target: Rs 475
Deutsche Bank said that the financials were weak as expected, but had better metrics. It also said that the stock offers a valuation upside when sector revenues recover.