Bharti Airtel - ARPM expansion in sight... - ICICIdirect

Bharti Airtel reported its Q3FY13 numbers, which were in line with our expectations operationally. However, a higher tax rate and a forex loss marred the bottomline. The topline stood at Rs.20239.5 crore (I-direct estimate - Rs.20066.6 crore) growing 2.8% QoQ without considering the one-offs in Q2FY13.

The growth was brought about by 2.8% growth in traffic on network at a more or less stable ARPM. Also, a strong growth of 12.7% QoQ in data revenue helped maintain the ARPM even with a decline in voice ARPM. A drastic cut in the subscriber base led to an optically strong growth in ARPU and MoU of 4.3% and 4.4%, respectively.

EBITDA came in at Rs.6169.7 crore at a margin of 30.5%, in line with our expectations. PAT, however, was marred by a high tax rate of 70.2% (which included a $11 million one off) and a forex loss of Rs.260 crore and fell below our expectation of Rs.911.4 crore at Rs.283.7 crore.

With the company reducing free/discounted minutes, ARPM expansion is in sight leading to a strong revenue growth. Also, regulatory uncertainties, which had remained an overhang on the sector, seem to be approaching an end, which is positive for the sector. We maintain our DCF based target price of Rs.385 and rate the stock as STRONG BUY.

Source : Equity Bulls

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