Earnings Today: Can Bharti Airtel Shrug Off Jio Impact In Q2?

Bharti Airtel, JSW Steel, Indigo and Dr. Reddy’s among companies to report Q2FY18 results.

BQ Research @bqprime

31 Oct 2017, 03:06 PM IST

Bharti Airtel Ltd., Vodafone India Ltd. and Idea Cellular Ltd. sim card packs are arranged for photograph in Mumbai, India (Photographer: Dhiraj Singh/Bloomberg)

India’s largest telecom operator Bharti Airtel Ltd., drugmaker Dr. Reddy’s Laboratories Ltd., Sajjan Jindal-led JSW Steel Ltd., and operator of the nation’s largest airline InterGlobe Aviation Ltd. are among the companies reporting second quarter results today.

Bharti Airtel may see a 4 percent decline in profit as intense competition led by Reliance Jio Infocomm Ltd. and low tariffs weigh on earnings in the seasonally weak July-September quarter. Revenue is expected to fall a percent over last year to Rs 21,754 crore, according to the Bloomberg consensus estimate. The higher tax incidence under the Goods and Services Tax will be an added burden as Airtel could not pass on the hike to customers. Its average revenue per user is expected to decline.

Earnings Today: Can Bharti Airtel Shrug Off Jio Impact In Q2?

What To Watch

Capital expenditure for second half of financial year 2017-18
Unlimited calling plans
Impact of interconnect usage charge cut
Timeline for completion of recent acquisitions

Dr. Reddy’s may see profit fall 8 percent to Rs 285 crore as higher competition and weak pricing in the U.S. continues to weigh on financials. The drugmaker’s revenue is expected to rise 5 percent over last year to Rs 3,715 crore, according to the Bloomberg consensus estimate. Growth will likely be led by the Indian market, followed by Europe and Russia. Sales in the U.S. market may decline 5 percent on a year-on-year basis. The operating margin may contract 240 basis points to 16.2 percent.

What To Watch

New product launches including Doxil, Suprax and Wellbutrin
Business recovery with restocking after GST implementation
Impact of out-licensing of DFD-06 to encore dermatology

JSW Steel may see a 42 percent jump in profit over last year to Rs 1,032 crore while revenue could jump 23 percent aided by higher domestic steel prices. However, operating margin may contract 170 basis points to 20.3 percent, according to the consensus estimate of analysts tracked by Bloomberg. JSW Steel’s standalone sales volume is likely to grow 2 percent to 3.9 million tonnes.

What To Watch

Cost of coking coal
Consolidated operational performance
Average realisations

Low-cost airline IndiGo’s parent Interglobe Aviation may see profit more than double in a quarter where passenger growth was the lowest since listing. Revenue may grow 20 percent to Rs 4,998 crore as average fares rose around 1.5 percent, according to the Bloomberg analysts’ consensus. Operating margin is expected to widen 380 basis points to 13.4 percent on a year-on-year basis.