The markets on Wednesday gave a thumbs-up to Bharti Airtel, the country’s largest telecom service provider, despite it posting a decline of 28 per cent in its consolidated net income, the ninth straight quarterly drop, to Rs 1,006 crore during the fourth quarter ended March 31.

Nevertheless, the stock went up on Wednesday by 2.4 per cent to close at Rs 317.95. The reason was primarily because operations were on the upside. The company showed improvement in its Ebitda (earnings before interest, taxes, depreciation and amortisation) margins and reduced losses in its African operations. Also, the increase in rates it has been able to undertake, especially after intense competition got muted in the mobile telephony segment, has helped it raise average revenue per user (Arpu) over two quarters without compromising on growth in minutes of usage, which went up for the first time after seven quarters.

The fall in net profit, on the other hand, was primarily due to the costs involved in borrowing money to finance the cost of expensive 3G spectrum and the roll out of the network. This was reflected in higher costs on account of the 3G licence fee amortisation (Rs 106 crore), 3G interest cost (Rs 84 crore), forex fluctuation losses (Rs 132 crore) and tax provisions (Rs 198 crore).

The company has said it planned total capital expenditure of $3-3.2 billion in India, Asia and Africa in 2012-13. Total revenue grew 15 per cent to Rs 18,729 crore for the March quarter, against Rs 1,293 crore in the same quarter last year.

For more visit: Business Standard

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