RCom Q1 net profit rises 8%

Reliance Communications (Rcom), the integrated telecom company, has had an 8.3 per cent rise in consolidated net profit at Rs 1,637 crore for the quarter ended June 30, beating market expectations. For the comparative quarter of the previous financial year, the company’s net profit stood at Rs 1,512 crore. Analysts were expecting the company to earn around Rs 1,200 crore in the reporting quarter.

In comparison, the country’s largest telecom operator, Bharti Airtel, has reported a 24 per cent rise in net profit of Rs 2,517 crore, and Idea Cellular posted a 12.9 per cent rise at Rs 297.06 crore for the quarter. RCom’s net profit is after adjustment of share of minority interest and associates, the company said in a release today.

The total income rose 15.5 per cent to Rs 6,145.2 crore during the quarter under review, as against Rs 5,322.2 crore recorded in the same period a year earlier. Ebitda (earnings before interest, taxes, depreciation and amortisation) rose 9 per cent to Rs 2,453 crore, while the Ebitda margin was 40 per cent.

According to Girish Trivedi, Deputy Director (ICT), Frost & Sullivan (South Asia and Middle East): “All the telecom companies have posted good results during the quarter. This is a good sign, that the industry is continuing to grow. The overall volume is also healthy, while the capex plans are also in line with the industry expectations.”

Rcom’s Managing Director Satish Seth said the company maintained profitability in the last two quarters, even as it completed one of the largest telecom infrastructure rollouts in the country. The recently announced reduction in mobile termination charges (MTC), a cut in domestic call charges by 10 paise to 20 paise, effective April 1, also impacted the company.

“The MTC cut has impacted all telecom companies, including RCom. However, we continue to post growth,” Seth said.