New Delhi: Shares in Bharti Airtel, India's biggest mobile phone carrier by subscribers, slumped to their lowest in two years after India's top telecoms carrier posted its 10th straight quarter of profit decline as cut-throat competition squeezed margins.
Bharti's shares ended 6.6 per cent lower at Rs 274.40 on the BSE, losing over Rs 7,200 crore worth of market capitalization in a single day.
Bharti Airtel also exited from the list of top 10 most valued firms in terms of market capitalization. It was replaced by private lender ICICI Bank.
The stock sharp selling pressure in the last hour of trade when the company's management said it will take more time to meet the targets in the African business. The company had earlier disappointed investors by missing profit estimates on the back of rising competition and regulatory overhang.
Bharti reported its 10th straight quarter of profit decline as competition squeezed margins despite gaining subscriber market share from some of its smaller rivals.
Quarterly net profit slumped 24 per cent at Rs 762 crore against Rs 1,006 crore in the previous quarter and much lower than estimates of nearly Rs 1,200 crore. Bharti Airtel had reported Rs 1,215 crore in net a year earlier.
"Bharti reported below estimates numbers, both domestic operation and African operation reported margin decline," Rikesh Parikh, VP Markets, Motilal Oswal Securities said.
Bharti said the new TRAI guidelines on combo packs hit revenues. The hike in service tax impacted revenues by 2 per cent, the company added.
Ebitda margins, a key measure of profitability, also declined to 30.2 per cent against 33.3 per cent quarter-on-quarter.
Consolidated sales rose 3.3 per cent sequentially at Rs 19,350 crore against Rs 18,729 crore in the March quarter. That was nearly Rs 100 crore less than estimates.
"Telecom revenues in India have been depressed due to hyper-competition and recent regulatory & tax developments,” chairman Sunil Bharti Mittal said.
(With inputs from Thomson Reuters)
Bharti's shares ended 6.6 per cent lower at Rs 274.40 on the BSE, losing over Rs 7,200 crore worth of market capitalization in a single day.
Bharti Airtel also exited from the list of top 10 most valued firms in terms of market capitalization. It was replaced by private lender ICICI Bank.
The stock sharp selling pressure in the last hour of trade when the company's management said it will take more time to meet the targets in the African business. The company had earlier disappointed investors by missing profit estimates on the back of rising competition and regulatory overhang.
Bharti reported its 10th straight quarter of profit decline as competition squeezed margins despite gaining subscriber market share from some of its smaller rivals.
Quarterly net profit slumped 24 per cent at Rs 762 crore against Rs 1,006 crore in the previous quarter and much lower than estimates of nearly Rs 1,200 crore. Bharti Airtel had reported Rs 1,215 crore in net a year earlier.
"Bharti reported below estimates numbers, both domestic operation and African operation reported margin decline," Rikesh Parikh, VP Markets, Motilal Oswal Securities said.
Bharti said the new TRAI guidelines on combo packs hit revenues. The hike in service tax impacted revenues by 2 per cent, the company added.
Ebitda margins, a key measure of profitability, also declined to 30.2 per cent against 33.3 per cent quarter-on-quarter.
Consolidated sales rose 3.3 per cent sequentially at Rs 19,350 crore against Rs 18,729 crore in the March quarter. That was nearly Rs 100 crore less than estimates.
"Telecom revenues in India have been depressed due to hyper-competition and recent regulatory & tax developments,” chairman Sunil Bharti Mittal said.
(With inputs from Thomson Reuters)
