Bharti Airtel (BHARTIARTL) Q4 04/05 earnings summary

Executive summary

• FY05 consolidated revenue rose 61.9% to Rs 81,558 million, EBITDA increased 79.8% to Rs 30,658 million, and net profit rose 107.6% to Rs 12,116 million.

• Completed mobile coverage across all 23 telecom circles; total customer base reached 11.84 million at March 31, up 66% YoY.

• Results were delivered amid steep tariff declines and intense competition, supported by subscriber growth, higher network traffic and expansion of non-voice services.

Financial highlights

• Consolidated gross revenue was Rs 81,558 million versus Rs 50,369 million; EBITDA was Rs 30,658 million versus Rs 17,055 million.

• Profit before tax reached Rs 15,832 million versus Rs 5,527 million; net profit was Rs 12,116 million versus Rs 5,837 million.

• Cash profit from operations increased 96.5% to Rs 28,219 million; operating cash flow was Rs 35,098 million versus Rs 18,838 million.

• Basic EPS was Rs 6.528 and diluted EPS Rs 6.440; prior-year EPS was Rs 3.149.

Outlook and guidance

• FY06 outlook anticipated Indian economic growth of 6–8%, supporting higher purchasing power and adoption and spending on telecom services.

• Low mobile penetration of 5% was viewed as a major growth opportunity; leadership, broad coverage and low-cost handsets were expected to accelerate adoption.

• Service quality, customer experience and innovative products were identified as key differentiators amid continued stiff competition.

• Industry consolidation and entry by foreign telecom operators could add pressure to tariffs and margins as licensing rules evolve.