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Hughes Tele: Commendable performance

Jan 14, 2002

Hughes Tele.com, the basic and broadband service provider in Maharashtra and Mumbai, has reported a stellar growth in sales for 3QFY02. Net revenues have gone up sharply by 99% to Rs 673 m backed by a 67% rise in subscriber base in 3QFY02 to 117,000 (70,000 in FY01). The company has reported operating profit of Rs 70 m in the December quarter itself which is 85% higher than Rs 38 m reported in the first half of the current fiscal. The company has achieved cash break-even in the second year of operation itself. Its operating margins also improved sharply from 3% in 2QFY02 to over 10% in the December quarter. This is due to reduction in administrative and other expenses.

(Rs m) 3QFY01 3QFY02 Change 9m FY01 9m FY02 Change
Sales 339 673 98.5% 965 1,833 89.9%
Other Income 360 76 -78.9% 392 232 -40.8%
Expenditure 398 603 51.5% 1,018 1,725 69.4%
Operating Profit (EBDIT) (59) 70   (53) 108  
Operating Profit Margin (%) -17.4% 10.4%   -5.5% 5.9%  
Interest 194 183 -5.7% 485 542 11.8%
Depreciation 186 321 72.6% 506 796 57.3%
Profit before Tax (79) (358) 353.2% (652) (998) 53.1%
Extraordinary item 40 15 -62.5% 69 45 -34.8%
Tax - -   - -  
Profit after Tax/(Loss) (39) (343) 779.5% (583) (953) 63.5%
Net profit margin (%) -11.5% -51.0%   -60.4% -52.0%  

Despite higher write-off of miscellaneous expenditure and depreciation charges (due to continuous expansion of network), net loss has come down sharply by 59% to Rs 343 m from Rs 827 m in 2QFY02. However, average revenue per subscriber (ARPU) has been declining since the last two quarters. Compared to previous quarter, ARPU declined by 15% in 3QFY02.

Key indicators...
(Rs) 1QFY02 2QFY02 3QFY02
Market cap/sales* (x) 6.4 4.6 4.4
Market cap/subscriber 133,090 113,127 95,616
Revenue/subscriber* 25,655 24,607 20,837
No. of subscribers 85,000 100,000 117,000
Per quarter addition in subscribers 15,000 15,000 17,000
(*annualised sales)      

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