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Bharti Airtel Q2 profit seen down 28%, India volumes may decline

Bharti Airtel , the country’s largest telecom operator in terms of subscribers, is expected to report a 28 percent degrowth in July-September quarter profit at Rs 1,050 crore QoQ on forex loss due to Naira devaluation & interest expenses.

Revenue is seen falling 0.2 percent quarter-on-quarter to Rs 25,495 crore in Q2.

It is traditionally a weak quarter for telecom companies. Hence, analysts say India Volumes may decline due to seasonality, though some pricing pressure may offset the volume decline.

Lower voice volume & voice revenue per minute may impact wireless EBITDA margin.

EBITDA (earnings before interest, tax, depreciation and amortisation) is seen falling 3.5 percent sequentially to Rs 9,250 crore, and margin may contract by 120 basis points to 36.3 percent in the quarter ended September 2016.

Revenue from its India business is likely to fall 1.7 percent QoQ to Rs 14,785 crore with EBITDA declining 3.2 percent to Rs 6,185 crore and margin contraction of 60 bps at 41.8 percent in Q2.

India key performance indicators

ARPU (average revenue per user) may decline to Rs 192 from Rs 196 and voice revenue per minute is seen falling to 33.5 paise from 33.49 paise QoQ. Volumes are also expected to decline to 308 billion minutes from 314.8 billion minutes and minutes of usage fall to 398 from 414 on sequential basis.

Analysts expect Africa performance to be muted due to impact of Naira devaluation, sale of Burkina Faso & Sierra Leone assets. Bharti sold Burkina Faso (on June 22) and Sierra Leone (July 19) operations to Orange.

Africa revenue may slip 6.5 percent sequentially to Rs 5,840 crore in Q2. EBITDA is likely to decline 11.4 percent to Rs 1,240 crore and margin may shrink by 120 basis points to 21.2 percent in the quarter ended September 2016.