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Bharti Q4 profit quadruples
By siliconindia
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Friday, 23 April 2004, 19:30 IST
NEW DELHI: Bharti Tele-Ventures Ltd, India's second-largest mobile phone firm, reported its quarterly profit more than quadrupled after it doubled subscribers in the world's fastest growing major wireless market.
Shares of Bharti, 28 percent owned by Singapore Telecommunications Ltd , jumped to a life high of 182.55 rupees, up 8.7 percent on the day, after it reported a consolidated net profit of Rs 304 crore for its fiscal fourth quarter ended March 31.
They subsequently paired gains to trade at Rs 180, up 7.2 percent.
Bharti posted a consolidated net profit of Rs 69.98 crore in the same quarter last year and Rs 161 crore in the third quarter.
"The results are better than expected," said Rahul Singh, a Bombay-based telecoms analyst at SSKI Securities. "It appears to be due to a mix of good operational performance, tax refunds and some other income."
Singh said there was still an upside for the stock, which he said could rise to 210 rupees by end-August on the back of a rapidly expanding mobile market.
Bharti said earlier this month its mobile users at the end of March more than doubled over the year to 6.5 million, while its total customer base, including fixed-line subscribers, doubled to 7.14 million.
Between 1.5 million and 1.9 million people sign up for mobile services in India each month, attracted by some of the lowest tariffs in the world: about two cents a minute.
Bharti is the largest provider of GSM (Global System for Mobile Communications) services, but has fewer customers than the telecoms arms of the Reliance group, which provides both GSM and CDMA (Code Division Multiple Access) services.
It also competes with the Tata group, which is another CDMA operator, as well as a unit of Hong Kong's Hutchison Whampoa group.
Bharti, India's most valuable telecoms stock with a market capitalization of around Rs 30,800 crore gets more than two-thirds of its revenue from mobile services.
There are more than 33 million wireless users in India and the number is expected to grow to at least 100 million by 2005 as only three in a 100 people own a handset. That compares with more than 20 per 100 in China and more than 60 in Europe.
The company, one of the earliest entrants in the industry, provides mobile services in 15 of the 23 zones or circles making up India's telecoms market.
The firm is expanding to cover the entire nation and recently bought rival Hexacom India Ltd for 4.30 billion rupees.
It plans to spend Rs 2500 crore to Rs 3000 crore in the year to March 2005 on networks to take on Reliance and other rivals, such as state-run Bharat Sanchar Nigam Ltd.
Bharti's shares have leapt 60 percent in 2004, roundly outperforming the main index's 1.5 percent rise.