Bharti Infratel’s Q2FY14 Net Dips By 22%

Bharti Infratel, one of the largest tower infrastructure providers in India, has announced its Q2FY14 numbers. During the quarter, the company’s revenues improved by 2% to Rs 2683 crore as against Rs 2622 crore in Q1FY14. Its net profit plunged by 22% to Rs 277 crore on a quarterly basis.

For the period in question, the total expenses (excluding finance costs) of the company grew marginally by 1% to Rs 2143 crore as it saw an increase in employee costs, power and fuel costs and rent expenses, which surged by 7%, 4% and 1% respectively. The repair and maintenance expenses declined by 9% on a QoQ basis.

The EBITDA came in flat at Rs 1072 crore in Q2FY14 as against Rs 1046 crore in the previous quarter, while the EBITDA margin was at 39.98% from 39.90%, a negligible growth of 9 basis points on a QoQ basis. In the same period, the other income of the company declined drastically by 63% to Rs 57 crore, and this hampered its net profits. In addition, its finance cost has also increased by 28% to Rs 134 crore on a QoQ basis.

Bharti Infratel’s total number of towers increased marginally by 156 units, from 82321 units to 82476. Its total co-locations rose by 1% to 159997 units QoQ, while the sharing factor grew from 1.91x in Q1FY14 to 1.93x in Q2FY14.

As on September 30, 2013, the company had taken various initiatives for effective utilisation of energy supply and usage of eco-friendly equipments like solar DG hybrid, integrated power management solution, variable speed direct and green towers.

On a YTD basis, Bharti Airtel’s stock has dipped by 21% to Rs 153.30, with a TTM price-to-earnings ratio of 25x. Considering the current growth of the company, it is advisable to stay away from this counter.