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Bharti Airtel
3QFY11 review: Mixed set of results
Bharti’s 3QFY11 headline figures belied expectations, revenue
falling 2% short. EBITDA was 9% below our estimate (6% below
Bloomberg consensus), due to higher re-branding costs (excl. rebranding
costs, EBITDA was 3% below estimate) and weaker
revenues. PAT was 24% below our estimate; PAT (excluding rebranding
costs) was ~4% below estimate.
India mobile revenue growth was a subdued, at 3.3% qoq, as wireless
traffic growth, considering the seasonality, was a whit weak (at
4.4% qoq, vs 10% for Idea). Overall, India + South Asia revenue
growth was 3.3% qoq. African revenues grew 4.2%, driven by strong
tariff elasticity. EBITDA margin (before re-branding costs) was stable
across India & South Asia (37.7%) and Africa (33.8%, incl. holdco).
Some encouraging trends in KPIs. Mobile ARPM in India was
steady qoq (-0.5%). Elasticity was evident in Africa, with wireless
traffic growing 17% on the back of tariff cuts (ARPM down 8%).
Improved share of non-voice revenue, both in India and Africa, is
positive. Yet the rise in churn rate (implications for subscriber
acquisition costs) in India (to 7.8%, vs. 5.9% in 2Q) is worrying.
Earnings call highlights: (1) 3Q ARPM decline in Africa, driven by
tariff cuts in remaining countries, apart from eight countries, which
saw tariff cuts in 2Q; (2) MNP is ‘net positive’ for Bharti, based on
initial feedback; (3) 3G launch in all Indian circles by Mar’11; (4)
company committed to African CEO’s aspirations - revenue/
EBITDA of US$5bn/US$2bn by FY12; (5) capex guidance for FY11
re-affirmed; (6) doubling of costs in African holdco, driven by
Zambia open offer, new headquarters; (7) increase in loss attributed
to minority interest driven by mgmt fee, interest on shareholders
loans charged to African operating companies.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Bharti Airtel
3QFY11 review: Mixed set of results
Bharti’s 3QFY11 headline figures belied expectations, revenue
falling 2% short. EBITDA was 9% below our estimate (6% below
Bloomberg consensus), due to higher re-branding costs (excl. rebranding
costs, EBITDA was 3% below estimate) and weaker
revenues. PAT was 24% below our estimate; PAT (excluding rebranding
costs) was ~4% below estimate.
India mobile revenue growth was a subdued, at 3.3% qoq, as wireless
traffic growth, considering the seasonality, was a whit weak (at
4.4% qoq, vs 10% for Idea). Overall, India + South Asia revenue
growth was 3.3% qoq. African revenues grew 4.2%, driven by strong
tariff elasticity. EBITDA margin (before re-branding costs) was stable
across India & South Asia (37.7%) and Africa (33.8%, incl. holdco).
Some encouraging trends in KPIs. Mobile ARPM in India was
steady qoq (-0.5%). Elasticity was evident in Africa, with wireless
traffic growing 17% on the back of tariff cuts (ARPM down 8%).
Improved share of non-voice revenue, both in India and Africa, is
positive. Yet the rise in churn rate (implications for subscriber
acquisition costs) in India (to 7.8%, vs. 5.9% in 2Q) is worrying.
Earnings call highlights: (1) 3Q ARPM decline in Africa, driven by
tariff cuts in remaining countries, apart from eight countries, which
saw tariff cuts in 2Q; (2) MNP is ‘net positive’ for Bharti, based on
initial feedback; (3) 3G launch in all Indian circles by Mar’11; (4)
company committed to African CEO’s aspirations - revenue/
EBITDA of US$5bn/US$2bn by FY12; (5) capex guidance for FY11
re-affirmed; (6) doubling of costs in African holdco, driven by
Zambia open offer, new headquarters; (7) increase in loss attributed
to minority interest driven by mgmt fee, interest on shareholders
loans charged to African operating companies.
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