Get documents about "148782531_Q4Earnings Update-Bharti Airtel
Shared by: huanghengdong
-
Stats
- views:
- 1
- posted:
- 12/15/2011
- language:
- pages:
- 5
Document Sample
Earnings Update
30 April 2010
Bharti Airtel Q4 FY10 Earnings Review
Recommendation : Marketperformer Declining tariffs dent revenue growth…
CMP : Rs 300
Bharti Airtel’s quarterly net revenue increased by 4.7% to Rs
Target : Rs 341 10,739 crore from the Rs 10,255 crore in the corresponding quarter
Upside Potential : 12% last year. Total revenues crossed the Rs 10,000 crore mark for the
Sensex : 17,584 first time. The company' posted a fourth-quarter consolidated net
profit of Rs 2,024 crore down by 1.1% from the Rs 2,048 crore
reported in the fourth-quarter of last year. The operating profit
margin during the quarter was at 37.93%, down by 140 bps QoQ.
Sector : Telecommunications
The company had a forex gain of Rs 157 crore during the quarter
Bloomberg code : BHARTI IN against a gain of Rs 149 crore in the previous quarter. There was a
Reuters Code : BRTI.BO one time acquisition related charges of Rs 97.64 crore. For the full
year, the company reported net revenue of Rs 41,829 crore up by
12% to from the Rs 37,352 crore last year. The net profit for the full
AT A GLANCE year stood at Rs 9,163 crore, up by 17% from the Rs 7,859 crore a
year ago. The operating profit margin was at 39.62% down by 47
Issued Equity Capital (Cr. Shrs) : 379.68 bps from the previous year.
Mkt. Cap (Rs. in Crs) : 1,22,225
Price elasticity kicks in…
Major Shareholders
Promoters (%) : 67.41% The company reported a strong growth in traffic carried on its
Free Float (%) : 32.59% mobile network. Traffic, measured as total minutes of usage, rose
12.8% to 172.8 billion minutes. The incremental usage of 19.6
Avg. Daily Vol. (‘000) : 2235 billion minutes is a record and is more than double the addition of
Background: Bharti Airtel is the flagship company of 9.6 billion minutes in the December quarter. The Average Revenue
Bharti Enterprises. The business at Bharti Airtel is per User declined by 4.6% QoQ to Rs 220. Consequently, the
structured as four strategic business units - Mobile, average revenue per minute fell 9.1% to 47 paise. This is higher
Telemedia, Enterprise and Digital TV. The mobile than the 7.8% drop in revenue per minute in the December quarter.
business offers services in India and Sri Lanka. The
Telemedia business provides broadband, IPTV and Mobile Segment continues to witness drop in margins
telephone services. The Enterprise business
provides end-to-end telecom solutions to corporate
customers and national and international long The revenue from mobile services stood at Rs 8227 crore, higher
distance services to carriers. The Digital TV by 3% QoQ and contributing 62% of its total consolidated revenues.
business provides DTH services across India. All The PBIT during the quarter was, however, lower 4% sequentially
these services are provided under the Airtel brand. at Rs 1569 crore with PBIT margin declining by 130 bps to 19.1%
Airtel’s national high-speed optic fibre network on QoQ. The revenues from its Telemedia services were down 1%
currently spans over 118,337 Rkms across India. QoQ at Rs 852 crore. The PBIT for the quarter, however, dipped
Airtel's international network infrastructure includes 13% sequentially to Rs 179.30 crore. the revenue was up 2% QoQ
ownership of the i2i submarine cable system and to Rs 2103 crore while the PBIT dipped 1% sequentially to Rs 811
consortium ownership in five global undersea cable
crore with PBIT margin declining by 90 bps to 38.5%. The total
systems, SEA-ME-WE 4, EIG, I-ME-WE, AAG and
UNITY. revenues from passive infrastructure services was higher 5% QoQ
at Rs 1918.20 crore while the PBIT margin improved 20 bps QoQ to
ANALYST 10.1%.
Ramasubramaniam +91 44 3000 7360
ramasubramanianp@dbschola.murugappa.com
FY Mar EV/EBIDTA
Turnover EBITDA Net Profit EPS (Rs) BVPS (Rs) PE (X) D/E ROE ROCE
(Rs Crore) (X)
2009 A 37,352 14,973 7858.95 20.70 80.07 14.49 8.37 0.42 30.19% 27.13%
2010 E 41,829 16,572 9163.13 24.14 101.92 12.43 7.76 0.41 26.53% 20.79%
2011 E 42,889 16,727 9299.85 24.50 126.57 12.24 7.58 0.38 21.45% 18.04%
The burden of 3G and Zain acquisition…
The management has indicated that the Zain deal is likely to be closed in the next couple of weeks. A
falling dollar could continue to hurt Zain, which bills in local currencies but uses the dollar to report its
earnings. Bharti has secured financing for the Zain acquisition, but it faces another huge bill: 3G
spectrum. The auction for 3G spectrum ends next week and pan India licenses have been bid up to more
than Rs 9000 crore and value is on the higher side. However the increase in mobile traffic and the high
rate of subscriber growth makes is pertinent to get additional spectrum in the longer term. We are
awaiting further clarity on the Zain acquisition and Bangladesh operations and hence we have not
factored the same in our estimates. We have not included the. Also, the high price 3G spectrum would
lead to further debt rising and this would stretch the balance sheet of the company, we would revise our
estimates in due course.
Outlook & Valuation
The sustained fall in tariffs over the past couple of quarters has triggered a growth in volume as
witnessed by a 13% growth in mobile traffic. The slowdown in earnings growth was expected because
fierce competition continues to drive prices down. Telecom companies will continue to feel the heat, as
tariffs continue to fall and costs go up as companies bid in ongoing auctions for third-generation mobile
spectrum. Going forward, Bharti’s diversified revenue stream and low cost of operation gives it a
significant advantage. However concerns on Zain deal and high price of 3G spectrum continue to be
dampeners. At CMP the stock is quoting at 7.6x its FY11E EV/EBITDA, we reiterate our Marketperformer
rating on the stock with a price target of Rs 341.
Chart 1: Operating Metrics
600 0.70
0.63 0.58
500 0.56 0.60
0.52
468
485 478 0.50
400 450 0.47
446
305 0.40
300 278
252
230 0.30
220
200
0.20
100 0.10
0 0.00
March 2009 June 2009 Sept 2009 Dec 2009 March 2010
Average Revenue Per User (ARPU) Average Minutes of Use Per User
Average Rate Per Minute (ARPM)
Trending for Key Performance Indicators
March Sept March
Parameters Unit Dec 2009 June 2009
2010 2009 2009
Consolidated
Customers 000's 130,686 121,853 113,440 105,196 96,649
Employees No. 18,354 18,201 18,598 23,789 24,538
Mobile services
Customers 000's 127,619 118,864 110,511 102,368 93,923
Pre-paid customers as a % of total customers % 95.8% 95.3% 95.2% 94.7% 94.2%
Post-paid customers as a % of total customers % 4.2% 4.7% 4.8% 5.3% 5.8%
Bharti's mobile subscribers market share % 21.8% 22.6% 23.5% 24.0% 24.0%
Average Revenue Per User (ARPU) Rs. 220 230 252 278 305
Average Rate Per Minute (ARPM) Rs 0.47 0.52 0.56 0.58 0.63
Average Minutes of Use Per User Minutes 468 446 450 478 485
Post-paid Voluntary Churn % 1.0% 1.0% 0.9% 1.2% 1.2%
Post-paid Company Initiated Churn % 0.5% 0.9% 1.0% 1.3% 1.4%
Pre- paid Churn % 5.9% 6.5% 4.6% 3.5% 3.2%
SMS Revenue as a % of Total Mobile Revenues % 5.7% 6.0% 4.9% 4.3% 3.7%
Employees No. 7,969 7,185 7,322 7,646 7,832
Telemedia Services
Customers 000's 3,067 2,989 2,928 2,828 2,726
Average Revenue Per User (ARPU) Rs. 937 964 989 1,027 1,071
Employees No. 3,921 4,473 4,705 9,514 10,022
Enterprise Services
Employees No. 3094 3,046 3,191 3,364 3,646
Others
Employees No. 2499 2,655 2,604 2,539 2,418
Passive Infrastructure Services
Employees No. 871 842 776 726 620
Q4 FY10 Results summary and comments
Particulars (in Rs. Q4FY10 Q3 FY10 QoQ Q4 FY09 YoY Comments
Crs)
Fall in tariffs dents
Revenues 10739.41 10304.95 4.22% 10255.14 4.72% revenue growth
Expenses 6665.8 6261.23 6.46% 6221.95 7.13%
EBIDTA 4073.61 4043.72 0.74% 4033.19 1.00%
Depreciation 1671.1 1591.45 5.00% 1324.64 26.16%
Other Income 43.21 22.62 91.03% 40.51 6.67%
Includes forex gain of Rs
157 crore against a gain
Interest -171.44 -131.88 30.00% 398.69 -143.00% of Rs 149 in Q3 FY10
PBT 2617.16 2606.77 0.40% 2350.37 11.35%
Tax 437.8 327.14 33.83% 254.34 72.13%
Extraordinary
income 0 0 - 0 -
Adjusted PAT 2024.11 2236.90 -9.51% 2047.73 -1.15%
EBIDTA margin 37.93% 39.24% 39.33%
EffectiveTax rate 16.73% 12.55% 10.82%
Net profit margin 18.85% 21.71% 19.97% -
DBS Cholamandalam Securites Limited
Member: BSE, NSE, MSE
Regd. Office: Dare House, 2 (Old # 234) N.S.C. Bose Road, Chennai – 600 001.
Website : www.choladbsdirect.com
E-mail id - customercare@dbschola.murugappa.com
To open Trading Account SMS CDWM TA to 55050
LOCATION BEM PHONE NUMBERS E-MAIL ID
AHMEDABAD Mr.Mehul M Min 079 - 64500318 / 19 mehulmm@dbschola.murugappa.com
BANGALORE Mr.Sathyanarayana.N 080 - 41503340 / 44 sathyanarayanaN@dbschola.murugappa.com
Mr.Baskaran.S 044 - 26208911 / 14 baskarans@dbschola.murugappa.com
CHENNAI Mr.Sundaresan.M 044 - 3000 7207 sundaresanm@dbschola.murugappa.com
COIMBATORE Mr.Mohan.VN 0422 - 4292041 mohanvn@dbschola.murugappa.com
DELHI Mr.Kunal Kaushish 011 - 30461162 / 63 / 64 kunalkaushish@dbschola.murugappa.com
Mr.Narayana Rao RRS 040 - 23316567 / 68 narayanaraorrs@dbschola.murugappa.com
HYDERABAD Mr.Srinivasa Reddy. DV 040 - 23316567 / 68 srinivasardv@dbschola.murugappa.com
Mr.Anupam Periwal 033 - 44103638 / 39 anupamp@dbschola.murugappa.com
KOLKATA Mr.Kumar Gaurav 033 - 44103638 / 39 kumargaurav@dbschola.murugappa.com
022 – 22153131 / 610 /
MUMBAI Ms.Sheetal Bheda 022 – 66103717 sheetalbheda@dbschola.murugappa.com
PATNA Mr.Sanjay kumar 0612 - 2500008 sanjaykumar@dbschola.murugappa.com
PUNE Me.Amol Giri 020 - 30264811 / 12 amolg@dbschola.murugappa.com
TRIVANDRUM Mr.Suresh Kumar.M 0471 - 3075224 / 225 sureshkm@dbschola.murugappa.com
REGIONAL EQUITY MANAGAER
CHENNAI Mr.Lakshmanan.TSP 98400 19701 lakshmanantsp@dbscholamurugappa.com
EAST & WEST Mr.Ananthnarayanan 99301 03070 ananthnarayananj@dbschola.murugappa.com
NORTH Mr.Ajay Kumar Minocha 97170 07227 ajaykm@dbschola.murugappa.com
SOUTH Mr.Shankar.PV 98404 94132 shankarpv@dbschola.murugappa.com
RESEARCH
Mr.Radhakrishnan.R Manager Research / Technicals 044 - 3000 7353 radhakrishnanR@dbschola.murugappa.com
Mr.Alagappan.A Financial Services 044 - 3000 7363 alagappana@dbschola.murugappa.com
Mr.Rohith Thomas Mathew Metals, Mining, Cement 044 - 3000 7361 rohithtm@dbschola.murugappa.com
Mr.Ramasubramaniam.P Telecom, Capital Goods 044 - 3000 7360 ramasubramaniamp@dbschola.murugappa.com
Ms.Sheetal Aggarwal Information Technology 044 - 3000 7365 sheetala@dbschola.murugappa.com
COMPLIANCE
Balaji.H Dy.Manager - Compliance 044 - 3000 7370 balajih@choladbs.murugappa.com
DISCLAIMER:
The research analyst who isis primarily responsible for this report certifies that:all ofall ofviewsviews expressed in this report accurately his or her personal personal
The research analyst who primarily responsible for this report certifies that: (1) (1) the the expressed in this report accurately reflect reflect his or her opinions
opinions about any the subject securities or issuers; andor issuers; andany of the research analyst's compensation was, is, or will be directly or indirectlybe directlythe
about any and all of and all of the subject securities (2) no part of (2) no part of any of the research analyst's compensation was, is, or will related to or
indirectly related to the specific recommendations or views expressed in this report. This report has of information that the basis of information that is already
specific recommendations or views expressed in this report. This report has been prepared on the basis been prepared on is already available in publicly accessible
available in publicly accessible media or developed through analysis of DBS Cholamandalam Securities Limited. DBS Cholamandalam Securities Limited makes
or developed through analysis of information, but we Securities Limited. DBS Cholamandalam or complete.
mediaeffort to use reliable, comprehensive DBS Cholamandalam make no representation that it is accurate Securities Limited makes every effort to use reliable,
every
comprehensive information, but we make no representation that it is accurate or complete.
The views expressed are those of the analyst and the Company may or may not subscribe to all the views expressed therein DBS Cholamandalam Securities
Limited reserves the right to make modifications and alterations to this statement as may be required from time to time without any prior approval. DBS
Cholamandalam Securities Limited, its affiliates, directors and employees may from time to time, effect or have effected an own account transaction in or deal
as agent in or for the securities mentioned in this report. The recipient should take this into account before interpreting the report.
This report is for private circulation and for information purposes only. It does not provide individually tailor-made investment advice and has been prepared
without regard to any specific investment objectives, financial situation, or any particular needs of any of the persons who receive it. All investors may not find
the securities discussed in this report to be suitable. DBS Cholamandalam Securities Limited recommends that investors independently evaluate particular
investments and strategies. Investors should seek the advice of a financial advisor with regard to the appropriateness of investing in any securities / investment
strategies recommended in this report. The appropriateness of a particular investment or strategy will depend on an investor’s individual preference. Past
performance is not necessarily a guide to future performance. Estimates of future prospects are based on assumptions that may not be realized. . Re-
publication or redistribution in any form, in whole or in part, is prohibited.
STOCK RATINGS : Outperformer: > 20% upside over the next 12 months; Marketperformer: trade within a +/-20% range over the next 12 months;
Underperformer: > 20% downside over the next 12 months.
