Mahanagar Telephone Nigam Limited has posted a 13.5% growth in net profits for the quarter ended 30th June 2000. The company has suffered a sharp erosion in operating margins. However a decline in the provision for taxation has more than made up for the decline in operating profits, resulting in an improved bottomline.
Operating Profit (EBDIT)
Operating Profit Margin (%)
Profit before Tax
Profit after Tax/(Loss)
Net profit margin (%)
No. of Shares (eoy) (m)
Diluted number of shares
Diluted Earnings per share*
We have projected a 9% growth in topline for the year and a 2% decline in gross margins. In view of the sharp decline in operating profits there may be a need to look into the margins projected by us. Detailed results are not available as yet.
The company has also suffered a decline in other income. Interest costs have risen and so has depreciation expenditure. MTNL has availed of tax benefits under section 80 1A. The earnings per share as a consequence stands increased to Rs 23.4, implying a P/E multiple of 7.3x.
MTNL has off late been affected by the TRAI's decision to restructure telephone rental and usage charges. The company is currently in the process of rolling out its cellular telephony services in both Delhi and Mumbai. It is also aggressively promoting its internet service to generate growth.
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