Bharti Airtel (Q4 FY14)

India Infoline News Service | Mumbai |

Bharti Airtel reported better than expected revenue growth of 1.7% qoq driven by 3.2% qoq rise in India revenues.

CMP Rs335, Target Rs370, Upside 10.4% 
  • Bharti Q4 PAT above our estimate adjusted for one-off loss to the tune of Rs2.3bn

  • Domestic wireless traffic growth of 3.8% qoq marginally ahead of forecast while pricing remains broadly stable qoq

  • EBIDTA margin adjusted for one-off credits flat qoq vs estimated +68bps rise

  • Africa performance remained lackluster impacted by seasonality headwind and SIM card sale restrictions in Nigeria; constant currency revs and margin down 0.9% qoq and 42bps respectively

  • Remains preferred bet underpinned by quality spectrum portfolio and strength in India business

Result table
(Rs m)
Q4 FY14
Q3 FY14
% qoq
Q4 FY13
% yoy
Net sales
222,605
219,607
1.4
195,924
13.6
Access and IUC
(28,732)
(28,755)
(0.1)
(27,499)
4.5
Network opex
(50,219)
(51,140)
(1.8)
(45,354)
10.7
License fees
(19,951)
(18,896)
5.6
(16,933)
17.8
Staff
(11,517)
(11,579)
(0.5)
(10,435)
10.4
S G & A
(39,120)
(38,303)
2.1
(35,098)
11.5
Operating profit
73,066
70,934
3.0
60,605
20.6
OPM (%)
32.8
32.3
52 bps
30.9
189 bps
Depreciation
(39,444)
(39,188)
0.7
(38,004)
3.8
Interest
(8,394)
(8,534)
(1.6)
(9,130)
(8.1)
PBT
25,228
23,212
8.7
13,471
87.3
Tax
(13,562)
(16,569)
(18.1)
(7,255)
86.9
Effective tax rate (%)
61.3
76.2
(1,497) bps
63.4
(215) bps
Minority & Associate
1,036
933
11.0
898
15.4
Exceptional items
(3,086)
(1,474)
109.4
(2,028)
52.2
Reported PAT
9,616
6,102
57.6
5,086
89.1
Source: Company, India Infoline Research


Revenues 

Bharti Airtel reported better than expected revenue growth of 1.7% qoq driven by 3.2% qoq rise in India revenues. Domestic mobile traffic grew 3.8% qoq, slightly ahead of our estimate and less than half of that posted by Idea (though Bharti has a larger base). Voice pricing was largely flat qoq in contrast to Idea’s 2.9% sequential decline and our expectation of +0.2% increase. Africa business was impacted by restrictions imposed by regulator on selling of SIM cards in Nigeria in March 2014 as also seasonality headwind. Africa US$ revenues declined 1.7% qoq vs our estimate for a +0.7% rise while margins too at 25.3% came below our expectation. Consolidated EBIDTA margin rose 52bps qoq, largely in line driven by lower network opex; however, EBIDTA included one-off credits to the tune of ~Rs1.3bn excluding which margins would have been flat qoq. Reported PAT missed our estimate but included a cumulative Rs2.3bn in except

BSE 519.00 [2] ([0.38]%)
NSE 517.95 [2.35] ([0.45]%)

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