Despite drop in Q2 results Airtel shares witness 9.5% surge

The consolidated revenues for just-ended quarter, at Rs. 21,777 crores, represented a year on year drop of 10.4 percent (reported drop of 11.7 percent) on an underlying basis (that is adjusted for Africa and Bangladesh divested operating units and tower assets sale), Airtel said.

Due to financial stress and declining profitability, India net profit has been lagging that of Africa for two consecutive quarters. In its largest market, India, Airtel's revenues declined 13 per cent on year to Rs 16,728 crore primarily led by drop in mobile revenues of 16.8 per cent compared with last year.

According to analysts, interconnect charges now account for 12 per cent of Airtel's operating profit.

Shares of Bharti Airtel today jumped over 8 per cent, adding Rs 16,290 crore to its market valuation, despite the company posting sixth-straight quarter of drop in earnings.

"The forex and derivative loss for the quarter was at Rs. 422 crores compared to loss of Rs. 302 crores in the corresponding quarter a year ago", it said.

Consolidated profit and revenue on year-on-year basis declined 76.5 percent and 11.66 percent, respectively. Mobile broadband customers jumped 33.6 per cent to 55.2 million from 41.3 million in the corresponding quarter a year ago. "This will eventually force operator consolidation and exits as we have witnessed in the recent past", said Gopal Vittal, Bharti Airtel's Managing Director and CEO, India and South Asia.

Data customers increased by 20.1 per cent to 21.7 million from 18.1 million in the corresponding quarter a year ago.

India's largest wireless operator (both in terms of customers and revenues) said voice volumes increased 3.6 percent quarter-on-quarter to 437.1 billion minutes and voice usage per customer rose 2.2 percent to 518 minutes for September quarter, but average revenue per user declined to Rs 145 compared with Rs 154 in previous quarter. Consolidated Ebit dropped 27 per cent to Rs 3,290 crore over the same period.

The net profit was 6.5 per cent lower compared to Rs 367 crore in the June quarter, but a whopping 76.5 per cent down over Rs 1,461 crore logged in the corresponding period of last fiscal. Foreign exchange and derivative loss for the quarter was Rs 422 crore compared to loss of Rs 302 crore in the corresponding quarter a year ago. Consequently, its net debt excluding the deferred payment liabilities to the Department of Telecommunications and finance lease obligations increased by Rs 2,554 crore sequentially in the quarter.

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