Airtel’s yearly profits soar 89% on better margins

Bharti Airtel limited, India’s third largest company by market capitalisation and largest telecom service provider

Bharti Airtel limited, India’s third largest company by market capitalisation and largest telecom service provider, today declared a net profit growth of 89 per cent to Rs 4,257 crore (more than $1 billion) for the year ending March 31, 2007. The company, which has a customer base of 3.9 crore, recorded a 4th quarter (January-March, 2007) revenue growth of 58 per cent to Rs 5,393 crore and profit growth of 98 per cent to Rs 1,353 crore.

Bharti Airtel’s bottomline growth is a reflection of a strong round-the-year operational performance, as its revenues for the whole year grew 59 per cent and stood at Rs 18,520 crore from Rs 11,621 crore last year.

Despite the announcement of these robust results, the company’s share price fell by Rs 36 today to close at Rs 826.3. The drop was a result of the market’s negative reaction to information technology (IT) and telecommunication minister Dayanidhi Maran’s suggestion to telecom operators on Thursday that call rates be pegged at 33 paise. Announcing the results, an upbeat Bharti Airtel chairman and managing director (CMD) Sunil Bharti Mittal said, “The next year will see network expansion of 30,000 new stations, almost 60 per cent of which will be in rural areas, raising our population coverage from 60 to 70 per cent. The financial year 2007-08 will see a capital expenditure of Rs 14,000-15,000 crore.”

Mittal added, “the company will also explore global acquisition opportunities across Saarc nations and Africa.” The host of value added services are becoming an integral part of the mobile phone and these would become the mainstay of future mobile services, he concluded.