Bharti Airtel (Q4 FY13)

India Infoline News Service | Mumbai |

Bharti posted 2% qoq rise in India & S Asia revenues to Rs145.5bn on the back of strong inline 3.2% increase in wireless revenues.

CMP Rs317, Target Rs330, Upside 4.1%

  • Q4 revenues at +1% qoq largely in line while EBIDTA margin at 31.7% exceeded expectation; PAT of Rs5.1bn impacted by Rs2bn in FX loss and Rs1.3bn in excess tax provision

  • India volume growth at robust ~5% qoq, ahead of our estimate even as pricing declined 0.5% qoq; data share continues to rise

  • India & S Asia EBIDTA margin up ~200bps qoq driven by strong wireless showing, lower SG&A costs and access charges

  • Africa revenues declined 1.1% qoq vs estimated 1.6% rise weighed down by seasonality headwind and general economic weakness; collateral impact seen on EBIDTA which declined ~100bps qoq

  • Company guides for FY14 capex of US$2-2.2bn of which US$600mn to be incurred on Africa; peak capex behind for Africa business   

  • India business has shown robust Q4 performance and though Africa may have bottomed out it could still act as a drag on consolidated entity; retain MP with 9-12 mth tgt of Rs330  

Result table
(Rs m) Q4 FY13 Q3 FY13 % qoq Q4 FY12 % yoy
Net sales 204,604 202,537 1.0 187,388 9.2
Access and IUC (27,498) (29,157) (5.7) (25,658) 7.2
Network opex (49,132) (48,461) 1.4 (41,583) 18.2
License fees (16,933) (16,784) 0.9 (16,218) 4.4
Staff (10,848) (10,211) 6.2 (8,717) 24.4
S G & A (35,323) (36,085) (2.1) (32,883) 7.4
Operating profit 64,870 61,839 4.9 62,329 4.1
OPM (%) 31.7 30.5 117 bps 33.3 (156) bps
Depreciation (39,828) (39,005) 2.1 (34,683) 14.8
Interest (10,065) (10,844) (7.2) (8,749) 15.0
PBT 14,977 11,990 24.9 18,897 (20.7)
Tax (7,884) (6,675) 18.1 (6,976) 13.0
Effective tax rate (%) 60.9 70.2 (926) bps 40.9 2,004 bps
Minority & Associate 23 (3) - (39) -
Adjusted PAT 7,116 5,312 34.0 11,882 (40.1)
Adj. PAT margin (%) 3.5 2.6 86 bps 6.3 (286) bps
FX gain/(loss) (2,030) (2,475) (18.0) (1,823) 11.4
Reported PAT 5,086 2,837 79.3 10,059 (49.4)
Source: Company, India Infoline Research

Revenues largely in line, EBIDTA surprises while PAT marred by one offs

Bharti reported mostly in line revenue growth of 1% qoq while EBIDTA margins surprised on the upside at +117bps qoq; PAT, however, was marred by Rs2bn in FX loss and Rs1.3bn in excess tax outgo (Rs0.4bn in DDT on Indus dividend & Rs959mn in increased deferred tax due to rise in surcharge from 5% to 10%).  


India KPIs
Wireless Q3 ‘11 Q4 ‘11 Q1’ 12 Q2’ 12 Q3’ 12 Q4’ 12 Q1’ 13 Q2’ 13 Q3’ 13 Q4’ 13
Subs base (' 000) 152,495 162.203 169,187 172.783 175,653 181,279 187,302 185,922 181,922 188,220
Additions (' 000) 9,203 9,708 6,984 3.596 2,870 5,626 6,023 (1,380) (4,000) 6,298
% qoq 37.9 5.5 (28.1) (48.5) (20.2) 96.0 7.0 - 189.9 -
ARPU 198 194 190 183 187 189 185 177 185 193
% qoq (2.0) (2.0) (2.1) (3.7) 2.2 1.1 (2.3) (4.1) 4.5 4.3
MOU/sub (mins) 449 449 445 423 419 431 433 417 435 455
% qoq (1.1) - (0.9)
 

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