Bharti Airtel second quarter profit slumps 30 percent

India’s largest telecom operator Bharti Airtel said Wednesday its net profit slumped 29.7 percent to Rs.721.2 crore for the quarter ended Sep 30 as increasing competition hit profit margins.

This is the 11th consecutive quarter of decline in the company’s profit.

However, Bharti Airtel’s total income went up to Rs.20,283 crore for the second quarter of 2012-13 as compared to Rs.17,276.4 crore in the corresponding quarter of previous year, the company said in a statement.

“Bharti Airtel’s second quarter revenue as well as operating margins came above our as well as street estimates. However its bottom line disappointed because of higher tax paid,” said Ankita Somani, research analyst for IT and telecom, at Angel Broking.

“Profitability was hit due to higher tax expense with tax rate coming in at 52 percent,” she said.

The company’s second quarter results disappointed the Dalal Street. The scrip price fell 0.95 percent to Rs.270.90. It had hit a low of Rs.269.65 in the intra-day.

The fall in Bharti Airtel’s share price was in contrast with the overall market trend. The benchmark Sensex of the Bombay Stock Exchange was ruling 0.61 percent or 115.09 points higher at 18,932.47 points.

“On prima facie the results seems good but it is led by one-offs. We maintain neutral view on the stock reiterating cautious stance on the telecom sector as the regulatory challenges such as one-time payout, re-farming of spectrum and upcoming 2G spectrum auction continue,” Somani said.