Bharti Airtel extends intraday rally on good growth in Africa biz in Q2

Bharti Airtel surged 8.43% to Rs 539.60 at 13:57 IST on BSE after the company reported an impressive growth at operating level in its Africa business in Q2 September 2017.

Meanwhile, the S&P BSE Sensex was up 374.11 points or 1.13% at 33,587.24.

On the BSE, 12.11 lakh shares were traded on the counter so far as against average daily volumes of 4.40 lakh shares in the past two weeks. The stock had hit a high of Rs 544.50 and a low of Rs 509.45 so far during the day.

Bharti Airtel's consolidated net profit fell 77% to Rs 343 crore on 10% decline in total revenue to Rs 21777 crore on an underlying basis in Q2 September 2017 over Q2 September 2016. Earnings before interest, taxation, depreciation and amortization (EBITDA) declined 15.4% to Rs 8004 crore in Q2 September 2017 over Q2 September 2016. EBITDA margin dropped 1.6% year-on-year at 36.8% in Q2 September 2017, led by India SA margin drop of 5% on an underlying basis (viz. adjusted for Africa/Bangladesh divested operating units and tower assets sale).

In constant currency terms, Africa underlying revenues grew by 2.8% year-on-year (reported growth of 2.6%) in Q2 September 2017. The company's continuous cost control initiatives have resulted in significant improvement of underlying EBITDA margin by 9.1% YoY at 32.1% in Q2 September 2017.

In a statement, Gopal Vittal, MD and CEO, India & South Asia said, the financial stress in the industry continues due to double digit revenue decline and will be further accentuated by the reduction in IUC rates in the next quarter. This will eventually force operator consolidation and exits as witnessed in the recent past. Airtel remains committed to its goal of increasing revenue market share in this competitive environment by providing superior customer experience and strategically investing behind building more data capacities, Vittal added.

Bharti Airtel said it has not entered into any agreements in relation to any proposal or discussions and there is no certainty of any transaction with regard to its stake sale in subsidiary Bharti Infratel until such time the board reviews and approves a final proposal.

Bharti Airtel has been approached by a few reputed Global Investors to acquire a significant stake in Bharti Infratel which, if accepted, could result in such investors acquiring control of Bharti Infratel.

It may be recalled that Bharti Airtel's board had constituted a committee in October 2016 to evaluate selling stake in Bharti Infratel, following which 13.96% shares was sold to a Group of Private Equity Investors and to QIPs by way of market transactions. Airtel now holds directly and through its subsidiary an overall shareholding of 58% in Bharti Infratel.

Bharti Airtel said its board also noted the decision taken by the board of its subsidiary Bharti Infratel on 30 October 2017 to explore and evaluate acquisition of stake in one or more tranches in Indus Tower with the aim of making it a subsidiary or wholly owned subsidiary. In addition, the board has authorized the company to continue evaluating and if found possible, selling shares in Bharti Infratel in one or more tranches from Airtel or its subsidiary Nettle.

Bharti Airtel is a leading global telecommunications company.

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