Bharti Q1 net falls 32% on forex losses and low tariffs

Low tariffs and forex losses of Rs 216 crore drove down the consolidated net profit at Bharti Airtel during the April-June quarter 32% at Rs 1,682 crore. This is the second consecutive quarter of falling profits for Indias largest telecom operator. However,the good news for the company is that tariff wars are slowly receding with increasing average talk time. The quarter did not see any major price war with Bharti being able to increase average talk time for the second consecutive quarter. During the period when the company took into account its African operations which came into its balance sheet for 23 days total revenues increased 17% at Rs 12,231 crore. The companys Ebitda slid below 40% to 36.9% from 41.3% in the same quarter last year. Bharti,which does not give a guidance said that the experience in the sector has been that the first and second quarter are weak due to seasonality factors while the third and fourth are stronger. The companys CEO (India and South Asia) Sanjay Kapoor said that it has been seen that the second quarter is the weakest.

Bharti shares on the Bombay Stock Exchange closed down 1.42% at Rs 319.70 on a day when the Sensex was down 149.80 points. Going forward,the company sees the era of irrational pricing to be over with players realising that lowering tariffs any further could severely damage them. The huge amounts bid by the companies for 3G and wireless broadband have further put a lid on any such moves. However,in an interview with FE,Kapoor chose to hedge his bets,saying irrationality can never be explained; so you never know.