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Bharti Airtel: Revenues Rise Profits Fall - Views on News from Equitymaster
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Bharti Airtel: Revenues Rise Profits Fall
Feb 4, 2016

Bharti Airtel has declared results for the third quarter of FY16. The company has reported a 3.8% YoY increase in total revenues and a 22.2% YoY decrease in net profits during the quarter. Here is our analysis of the results.

Performance summary

  • Consolidated sales grew by 3.8% YoY during the 3QFY16. African operations as well as the tower business remained under pressure, preventing much growth in the topline.
  • Mobile subscriber base in India grew by 12% YoY during the quarter. Total count of mobile subscribers in India stood at a little over 243.2 m at the end of December 2015. Total subscriber base on the network (including South Asia and African operations) grew by 12.1% YoY during the quarter.
  • Operating margins improved to 35.1% during the quarter. The operating profit grew by 8.5% YoY.
  • Interest expenses (including the cross currency impact) were up 32.8% YoY.
  • The net profit decreased by 22.2% YoY largely due to an exceptional item of Rs 3,405 m. The net margin fell to 4.6% in the quarter compared to 6.2% seen in 3QFY15.

Financial Snapshot

(Rs m) 3QFY15 3QFY16 Change 9MFY15 9MFY16 Change
Sales 232,281 241,034 3.8% 690,953 716,361 3.7%
Expenditure 154,424 156,522 1.4% 458,765 466,785 1.7%
Operating profit (EBITDA) 77,857 84,512 8.5% 232,188 249,576 7.5%
Operating profit margin (%) 33.5% 35.1%   33.6% 34.8%  
Interest expense/(income) 10,523 13,971 32.8% 30,430 52,730 73.3%
Depreciation 38,015 43,541 14.5% 116,910 126,335 8.1%
Share of loss/(gain) in associates 1,800 2,463 36.8% 5,087 6,993 37.5%
Exceptional items (2,921) (3,405)   (6,491) 17,505  
Profit before tax 28,198 26,058 -7.6% 83,444 95,009 13.9%
Tax 13,145 13,499 2.7% 43,236 48,606 12.4%
Profit after tax/(loss) 15,053 12,559 -16.6% 40,208 46,403 15.4%
Minority interest 688 1,390 102.0% 926 4,464 382.1%
Net profit 14,365 11,169 -22.2% 39,282 41,939 6.8%
Net profit margin (%) 6.2% 4.6%   5.7% 5.9%  
No. of shares         3,991.9  
Diluted Earnings per share (Rs)*         13.7  
P/E ratio (x)*         22.3  

* trailing 12 months earnings

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