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MarketScreener Homepage  >  Equities  >  MUMBAI STOCK EXCHANGE  >  Bharti Airtel Ltd    532454   INE397D01024

BHARTI AIRTEL LTD

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Vodafone Idea makes £5.6 billion loss after provisions for government dues

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11/15/2019 | 12:05am EST
FILE PHOTO: Man speaks on his mobile phone as he walks past the logos of Vodafone painted on a roadside wall in Kolkata

Indian mobile carrier Vodafone Idea on Thursday reported the biggest quarterly loss in India's corporate history after making provisions for outstanding government dues.

Vodafone Idea, made up of the local unit of Vodafone Group Plc and billionaire Kumar Mangalam Birla's Idea Cellular, reported a consolidated net loss of 509 billion rupees (£5.57 billion) in the second quarter to September.

The company took a charge of 256.78 billion rupees for the quarter after India's Supreme Court last month upheld a demand by the telecoms department that wireless carriers pay 920 billion rupees in overdue levies and interest.

Vodafone Idea and rival Bharti Airtel, two of India's three main mobile carriers, will have to pay a bulk of this state demand.

Bharti Airtel on Thursday reported a consolidated net loss of 230.45 billion rupees (£2.52 billion) in three months to September.

Bharti said it made a provision of 284.50 billion rupees, more than 92% of the overall charge for exceptional items, after the Supreme Court ruling.

Telecom providers in India pay the Department of Telecommunications (DoT) nearly 3-5% of their adjusted gross revenue (AGR) in usage charges for spectrum or airwaves and 8% of AGR as licence fees.

The DoT and the mobile carriers have been at odds over the definition of AGR. The companies argue that AGR should comprise just revenue accrued from core services, while the DoT says AGR should include all revenue.

The Supreme Court last month upheld the DoT's view on AGR.

Vodafone Idea said it was in active discussions with the government seeking financial relief and also in the process of filing a review petition with the Supreme Court.

"It is to be noted that our ability to continue as a going concern is dependent on obtaining the reliefs from the government... and positive outcome of the proposed legal remedy," Vodafone Idea said in a statement.

The company's gross debt at end-Sept. stood at 1.17 trillion rupees. Analysts have previously warned that Vodafone Idea will be the worst hit after the Supreme Court ruling given its already stretched balance sheet.

"Vodafone results are a reflection of the company’s inability to compete effectively in a three player market," said Deepak Jasani of HDFC Securities.

"Apart from its impact on its equity value, this result will surely result in wider financial repercussions because it will hit the lenders and debt investors in the company, including mutual funds."

Analysts on average expected Vodafone Idea to report a consolidated net loss of 44.22 billion rupees for the quarter, according to Refinitiv data, although those figures did not include the charge.

The wireless carrier had posted a net loss of 49.74 billion rupees a year ago.

Vodafone Idea's consolidated revenue from operations for the quarter rose 41.4% year-on-year to 108.44 billion rupees.

On Thursday, Vodafone Idea said it plans to sell its 11.15% stake in mobile mast operator Indus Towers once its merger with Bharti Infratel receives regulatory clearances.

Bharti Airtel's MD and CEO, India & South Asia, Gopal Vittal said: "We continue to engage with the government and are evaluating various options available to us."

"We are hopeful that the government will take a considerate view in this matter given the fragile state of the industry," Vittal said.

Analysts on average expected Bharti Airtel to report a loss of 11.16 billion rupees for the three months to the end of September, according to Refinitiv data.

Bharti, which runs operations in South Asia and Africa, said its Indian revenue rose 3% year-on-year to 153.61 billion rupees.

Earlier on Thursday, Singapore-based Singtel posted a second-quarter loss of S$668 million (£384 million) hurt by a one-time charge recorded by Bharti.

Singtel is the biggest shareholder in Bharti Airtel, with an effective stake of about 35%.

By Sankalp Phartiyal

Stocks mentioned in the article
ChangeLast1st jan.
AIRTEL AFRICA PLC 2.10% 73 Delayed Quote.-8.69%
BHARTI AIRTEL LTD 0.09% 524.05 End-of-day quote.15.43%
BHARTI INFRATEL LIMITED 0.87% 244.3 End-of-day quote.-3.25%
DOW JONES AFRICA TITANS 50 INDEX 0.07% 537.59 Delayed Quote.-0.01%
S&P AFRICA 40 INDEX 0.94% 167.62 Delayed Quote.-3.88%
VODAFONE GROUP PLC 1.49% 156.5 Delayed Quote.6.64%
VODAFONE IDEA LIMITED 2.54% 6.05 End-of-day quote.-1.63%
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Financials (INR)
Sales 2020 863 B
EBIT 2020 82 163 M
Net income 2020 -257 969 M
Debt 2020 1 074 B
Yield 2020 0,52%
P/E ratio 2020 -9,17x
P/E ratio 2021 202x
EV / Sales2020 4,56x
EV / Sales2021 4,04x
Capitalization 2 859 B
Chart BHARTI AIRTEL LTD
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Bharti Airtel Ltd Technical Analysis Chart | MarketScreener
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Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 26
Average target price 527,84  INR
Last Close Price 524,05  INR
Spread / Highest target 14,5%
Spread / Average Target 0,72%
Spread / Lowest Target -30,0%
EPS Revisions
Managers
NameTitle
Gopal Vittal CEO, Managing Director & Executive Director
Sunil Bharti Mittal Chairman
Ajai Puri Chief Operating Officer-India & South Asia Region
Nakul Sehgal Chief Financial Officer
Harmeen Mehta Global Chief Information Officer
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