Analysts corner: Bharti Televentures

Edelweiss Securities, in its results update on Bharti Televentures, changes its recommendation from "value buy" to "accumulate". The report states that the company's Q3 FY06 numbers were lower than the expectations.

On a q-o-q basis, revenues were up 11.7 per cent, to Rs 3,000 crore, while net profits grew by only 4.7 per cent, to Rs 540 crore.

The earnings before interest, tax, deductions and amortisation (EBITDA) margin was down by 67 bps, to 36.6 per cent, while net margin slid for the third consecutive quarter, by 120 bps to 18 per cent.

Despite stable mobility, the overall EBITDA margin was negatively impacted due to pricing restrictions coming in force, as well as aggressive rollouts in newer geographies.

The report expects the company to maintain growth in its mobility business on the back of accelerated growth in subscriber additions, higher minutes of usage (MoU) and relatively higher operating margins on the lifetime validity schemes, which could likely cushion margin pressures, going forward.

On the Infotel business, the report believes that revenue growth is likely to be maintained on the back of increase in coverage, but pricing and competition is likely to keep long-distance and enterprise data business segments' profitability under pressure.


From Business Standard