Bharti Infratel net profit up 19% in March quarter; board approves share buyback

Bharti Infratel, the leading telecom infrastructure company, reported a seven per cent year-on-year growth in consolidated revenue for the March quarter at Rs 3,162 crore. Operating income grew nine per cent to Rs 1,444 crore.

Consolidated revenue comprises primarily that from co-locations of Bharti Infratel and from a 42 per cent equity holding in Indus Towers.

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Growth was driven by steady deployment of infrastructure by companies to meet data demand. Consequently, profit after tax increased rose 19 per cent over a year before to Rs 662 crore, ahead of the Street's estimate of Rs 592 crore. Free operating cash flow grew 26 per cent to Rs 937 crore.

Analysts were expecting revenue growth to be flat year-on-year, due to cancellation of tenancies by Videocon during the quarter. However, the company reported revenue growth of seven per cent. Consolidated revenue for the full year grew five per cent to Rs 12,308 crore. Operating income rose eight per cent to Rs 5,403 crore, an operating margin of 43.9 per cent for the full year. Profit after tax for the full year rose 20 per cent to Rs 2,382 crore.

Akhil Gupta, chairman, said: "As anticipated, 2015-16 witnessed a major growth in rollout of mobile broadband networks by telecom operators, with the number of 3G and 4G (third and fourth generation technology) installations growing over three times the previous year. We are confident that as more operators step up their rollouts, this trend would further accelerate in the coming year. Bharti Infratel & Indus Towers, being the leaders, are fully geared and in the best position to capitalise on this growth."

The board of directors has proposed a final dividend of Rs 3 an equity share for the year. In addition, it approved a share buyback for Rs 2,000 crore. The total cash outgo for dividend and buyback, inclusive of Rs 116 crore as tax on dividend, will be Rs 2,685 crore. The buyback will be through the tender offer method on the stock exchange.The final dividend is subject to approval of shareholders in the ensuing annual general meeting and the buyback, too.