Bharti Airtel net profit declines to Rs 1,011 crore, stocks plunge 4%

India's biggest telecom operator Bharti Airtel has reported a decline in sequential profit. Consolidated net profit in the third quarter declined to Rs 1,011 crore against Rs 1,027 crore in the second quarter. Profits declined despite the company hiking prices this quarter.

However, revenues rose to Rs 18,477 crore in the third quarter against Rs 17,269.8 crore in the second quarter.

A brokers' poll conducted by NDTV Profit had expected profit after tax (PAT) at Rs 1,364.30 crore. Sales were seen to rise to Rs 18,410 crore.

Shares of Bharti plunged nearly 4 per cent in early trade in a flat market.

"Revenues were in-line but EBITDA and PAT were below our forecast...so they were a disappointment," Bhavesh Gandhi, Telecom Analyst at IIFL said.

Analysts attributed the poor numbers to flat growth in traffic. Traffic growth was likely 1-2 per cent against estimates of 4 per cent. In contrast, Idea reported a growth of 7 per cent in the third quarter.

Minutes of usage were down 1 per cent against estimates of a rise of 2 per cent. Average revenue per user (ARPU) in the third quarter stood at Rs 187 against estimates of Rs 190.

Earnings before interest, tax, depreciation and amortization (EBITDA) margins also declined 32.2 per cent against 33.7 per cent (quarter-on-quarter).

Bharti's Africa revenues stood at $1.06 billion. The company managed to report a forex gain of Rs 13 crore despite the rupee depreciating nearly 10 per cent in the last quarter.

“I’m pleased that investments in branding and networks continue to be our focus in India, as we enhance customer experience for voice quality and cater to the ever increasing demand for data…  In Africa, we crossed the 50 million customer milestone and are now one of the fastest growing telecom companies in the continent," Sunil Bharti Mittal, Chairman and Managing Director of Bharti Airtel said in a statement.