Bharti Airtel share price rallies 5% post Q4 FY18 results; Nomura maintains buy

Bharti Airtel share price rallied over 5 per cent on Wednesday after the company's March quarter earnings came in better than expected. The telecom major may have reported its lowest quarterly net profit in at least 14 years, losses were not as steep as expected as analysts estimated the company to report net loss for first time ever.  Reacting to the results, the stock gained as much as 5.14 per cent to hit its intraday high of Rs 427 on the BSE. Global brokerage Nomura miantained its buy rating on the stock with a target price of Rs 505 per share. 

"There was margins surprise across the board, and mobile business metrics was not that bad too," said Nomura in a research note. 

"The company surprised on earnings front even as its India business is turning unprofitable. Positive surprise was driven by monthly ARPU, which came above Nomura's estimates. Operating performance was resilient vs estimates," it added.

The net revenue of the company during the quarter stood at Rs 19,634 crore, down 10.5 per cent from Rs 21,935 crore posted during the corresponding quarter in 2017-18.

The statement said during the quarter mobile data traffic had grown more than six times to 1,540 billion MBs in the quarter as compared to 225 billion MBs in the corresponding quarter last year. Mobile broadband customers increased by 79.3 per cent to 76.6 million from 42.7 million in the corresponding quarter last year.

"The telecom industry continues to witness below cost, artificially suppressed pricing. Industry revenues were further adversely impacted this quarter due to the reduction in International termination rates. Airtel continued to consolidate its leadership position this quarter," said Gopal Vittal, MD and CEO, India & South Asia.

"Our strategic investments in data capacities, innovative digital content through Airtel TV, customer friendly bundles and upgrade programs led to the highest ever mobile data customer additions of 15 million during the quarter. Usage parameters remained robust on a year-on-year basis, we saw data and voice traffic grow 584 per cent and 55 per cent respectively," he added.

Bharti Airtel Board declared a final dividend of Rs 2.5 per share (face value of Rs 5 per share) for the financial year ended March 31, 2018. Given the interim dividend of Rs 2.84 per share, the total dividend for the year comes to Rs 5.34 per share which is entirely a pass-through of dividend from the subsidiaries, the company said.