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MTNL: Depreciation effect

May 11, 2004

MTNL, the basic telecom services operator in Delhi and Mumbai announced its FY04 numbers a few days back and the results indicate an improving scenario for the company. For FY04, the bottomline has risen by a sharp 46% on the back of a marginal 5% rise in the topline. The performance has been brought about by a sharp fall in depreciation as well as an improvement in the operating margins of the company. For the March quarter, while the bottomline has risen by a significant 67% topline growth stood at 10%. In addition to the sharp fall in depreciation, operating margins have improved significantly in the March quarter.

Rs m 4QFY03 4QFY04 Change FY03 FY04 Change
Sales 13,565 14,927 10.0% 58,065 61,011 5.1%
Other income 814 921 13.1% 2,241 2,958 32.0%
Expenditure 9,816 9,981 1.7% 38,710 39,449 1.9%
Operating profit (EBDIT) 3,749 4,945 31.9% 19,355 21,562 11.4%
Operating profit margin (%) 27.6% 33.1%   33.3% 35.3%  
Interest 124 79 -36.2% 328 322 -1.9%
Depreciation 2,463 1,439 -41.6% 8,670 5,272 -39.2%
Profit before tax 1,976 4,349 120.1% 12,598 18,926 50.2%
Extraordinary items - -   (226) -  
Tax 140 1,278 814.4% 3,600 6,149 70.8%
Profit after tax/(Loss) 1,836 3,071 67.2% 8,772 12,777 45.7%
Net profit margin (%) 13.5% 20.6%   15.1% 20.9%  
No. of Shares 630.0 630.0   630.0 630.0  
Diluted Earnings per share* (Rs) 11.7 19.5   13.9 20.3  
P/E Ratio (x)         7.1  
(* annualised)            

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