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Bharti Infratel Q3 profit falls 6% YoY to Rs 585 crore

Total income increased 10.88 per cent year-on-year to Rs 1,716.30 crore during the quarter.

ET Bureau|
Last Updated: Jan 17, 2018, 07.33 PM IST|Original: Jan 17, 2018, 05.31 PM IST
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Total income increased 10.88 per cent year-on-year to Rs 1,716.30 crore during the quarter.
New Delhi: Bharti Infratel’s net profit dropped 6% on year in the quarter ended December 2017, owing to rapid reduction in co-location of telecom sites as carriers undergoing consolidation remove overlaps in respective networks.

The telecom tower company’s consolidated net profit for October-December period came to Rs 585 crore, from Rs 620 crore in the same period the year before. Consolidated revenue rose 7% on a like-to-like basis to Rs 3,655 crore, the company said in a statement on Wednesday.

“We are all aware that the Indian telecom industry is transforming with unprecedented consolidation. Inevitably and as anticipated, we saw exits of co-locations from such consolidating operators this quarter,” Akhil Gupta, Chairman, Bharti Infratel Ltd, said in the statement.

He added that while there would be more exits in the coming few quarters owing to consolidation, speedy nationwide 4G rollouts by remaining operators would lead to long-term growth.

“With our reach, financial strength and operational expertise, we are in the best position to capture what we believe is a big potential for our industry based on exciting data-based demand,” Gupta said.

India’s only listed tower company had a total tower base of 91,007, including its 42% stake in Indus Towers. In the third quarter, it lost 6,612 co-locations, taking the total count to 213,476 as of December-end. Co-locations are locations where it has deployed the mobile telecommunications antennas of multiple service providers on a single structure.

The exits reflected in the average sharing factor which fell to 2.38 from 2.41 in the previous quarter ended September 30, while sharing revenue per tower a month fell to Rs82,794 compared with Rs83,040.

India's No 2 and 3 carriers, Vodafone India and Idea Cellular, are merging their operations, while market leader Bharti Airtel is merging operators like Telenor, Tikona and Tata Teleservices’ consumer business with itself. New entrant Reliance Jio has also decided to buy wireless assets of Reliance Communications. The rapid pace of M&A in the telecom industry will soon lead to a market of three major private operators plus state-run carriers.

Earnings before interest, tax, depreciation and amortisation (Ebitda) margins for the third quarter contracted to 44.1% from 44.8%.

Consolidated expenses for the quarter totalled Rs 2,042.2 crore, up 7.2% on year. The largest components of the expenses were power and fuel, amounting to Rs 1,298 crore. The other key expenses incurred were rent of Rs 317 crore, repair and maintenance.

The company also incurred a finance cost of Rs 51 crore in the third quarter, compared to a finance income of Rs 94.7 crore the year before and Rs10.9 crore in the fiscal second quarter.

Bharti Infratel stock rose 0.26% to close at Rs 368 on Wednesday on the BSE, where the benchmark rose 0.89%. The results were declared after market hours.

During the quarter, Bharti Infratel's board decided to explore and evaluate acquisition of stake in one or more tranches in Indus Towers, with the aim of making it a subsidiary or wholly owned subsidiary of Bharti Infratel.

Parent Bharti Airtel though over 2017 sold 18.5% in Infratel, raising nearly Rs12,100 crore to pare debt. The Bharti Airtel board has authorized the company to continue evaluating selling further stake of Bharti Infratel in one or more tranches.
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