VN Corporate VN Research & Consulting VN Sourcing Practice IndiaNotes
 Like us on facebook  Follow us on twitter  Follow us on LinkedIn  IndiaNotes on Google Plus  IndiaNotes on Pinterest  IndiaNotes on Stumbleupon  Subscribe to our feeds

lanterns

Stocks  A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z
Search
Feedback
You are here : IndiaNotes >> Research & Analysis >> Companies >> Bharti Airtel Ltd. >> Research

Bharti Airtel: Disappointing Q1FY13, PAT declines 37% y-o-y

Motilal Oswal | 10 Aug, 2012  | Follow Author | Add to my Favourites 


Key Result Highlights

- Bharti reported disappointing 1QFY13 with PAT declining 37% y-o-y and 24% q-o-q to Rs7.6b, significantly below the estimate of Rs10.7b. While India & SA margins eroded sharply on Bharti's increased aggression to protect revenue market share, performance in Africa was hit largely due to adverse macro factors.

- Consolidated revenue of Rs 193.5b (+ 3.3% q-o-q) was 1% above estimate. However EBITDA/PAT were 8/29% below estimates due to 300bp q-o-q EBITDA margin decline. Reported PAT was boosted by Rs1.6b forex gain.

- Revenue for India and South Asia (SA) grew 8.6% y-o-y and 2.2% q-o-q to Rs137.2b (1% above est). EBIDTA declined 8% q-o-q led by 9/6% q-o-q decline in mobile/passive infrastructure segments.

- India and SA operating costs increased 17% y-o-y and 7.7% q-o-q. EBITDA margin decline was largely led by higher SGA (160bp) and network costs (125bp).

- India mobile traffic grew 3.7% q-o-q and mobile RPM declined 2.5% q-o-q to 42.7p; both in line with the estimates. Churn levels remain elevated at ~9% per month.

- Africa EBIDTA declined 8% q-o-q to USD275m (vs est of flat EBITDA) on a 0.4% q-o-q revenue growth (2.7% traffic growth, 3.1% RPM decline). EBITDA margin declined 200bp q-o-q to 25.8%.

- Africa business has been impacted due to higher economic linkages of African economies with Europe, violence in Nigeria/DRC and increased competition in Ghana.

- Consolidated net debt increased by Rs32.5b q-o-q to ~Rs683b. Finance cost declined 22% q-o-q to Rs8.2b as Bharti reported a forex gain of Rs1.6b vs loss of Rs1.8b in 4QFY12.

Outlook: Motilal Oswal downgrades the EBITDA estimates by 10-11% and PAT by 47-48% led by lower margin assumptions. Traffic/revenue growth is likely to be under pressure in 2QFY13 due to seasonality.

Motilal Oswal now expects 8% EBITDA CAGR over FY12-14E. The stock trades at EV/EBITDA of 7.1x FY13E and 6x FY14E. Rating is Under Review.

  Read full report Click here to read the full report

logo
BSE
412.30 +10.60
(2.64%)
NSE
413.00 +11.30
(2.81%)
Read More
About Motilal Oswal

Motilal Oswal was founded in 1987 as a small sub-broking unit, with just two people running the show. Today it has a 2000 member team with a networth of Rs7 bn and market capitalization as of March 31, 2008 at Rs19 bn.

 

For more information please write in to editor@indianotes.com

Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.



Technical Calls

What are technical calls?

Other Articles


Have a question?

Sanjay Chhabria
Equity Analyst and Investment Consultant - xxx



[X] Amazon Deals