Bharti Infratel Ltd.'s profit rose more than expected even as the number of tenants on each tower fell slightly.
Profit in the June-ended quarter grew 5.3 percent sequentially to Rs 638 crore, according to its stock exchange filing. Analysts tracked by Bloomberg had expected Rs 602 crore.
- Revenue grew 0.3 percent to Rs 3,674 crore from Rs 3,662 crore.
- Operating profit fell 5 percent to Rs 1,524 crore.
- Operating margin contracted to 41.4 percent, at its lowest in the last 18 quarters.
Sunil Bharti Mittal's mobile tower arm has been an indirect casualty of Mukesh Ambani's cheap data. Reliance Jio Infocomm Ltd. tariff war drove smaller incumbents like Reliance Communications Ltd. and Aircel Ltd. and Tata Teleservices Ltd. out of business, causing tenancy losses for tower firms.
To counter that, Bharti Infratel is merging businesses with Indus Tower Ltd. to create the world's largest telecom tower infrastructure company outside China. The market regulator and exchanges approved the merger earlier in the day.
Shares of tower unit have plunged 24.2 percent so far this year, and 10.6 percent in the April-June period. But Bharti Infratel is confident that the worst is now behind it.
“With the consolidation phase largely over, the Indian telecom industry is now witnessing an integration phase as operators consolidate their networks and spectrum before the next phase of rollouts,” Chairman Akhil Gupta said in the media statement. “We remain confident of the long-term growth potential of the Indian telecom sector driven by rising user demand, availability of cheaper handsets, introduction of new technologies and availability of rich content to the customers.”
Other Earnings Highlights
- Operating free cash flow at Rs 991 crore.
- Final dividend of Rs 14 per share for the year-ended March 2018 has been approved by the board.
- The company reported 4,818 co-location exits during the quarter.
- Number of towers rose by 308 sequentially.
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