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Tariff battles leave Bharti bruised
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Tariff wars and intense competition took their toll on the October-December earnings of Bharti Airtel. For the first time ever, the country’s largest telecom operator witnessed its slowest revenue and profitability growth at 1 per cent and 2 per cent, respectively. The telecom sector’s loss of sheen over the past year is evident from a comparison with Bharti’s performance in the same quarter last year.

In Q3 FY’09, its revenues had grown by 38 per cent, while net profit increased 25 per cent. The slowdown has been evident from Q2, which saw revenues and profitability grow by 9 per cent and 13 per cent, respectively.

Bharti posted a net profit of Rs 2,159 crore in Q3, against Rs 2,210 crore in the same period last year. Revenues stood at Rs 9,772 crore, against Rs 9,633 crore. During the period, the EBIDTA margin — a key barometer of company profitability — declined 1 per cent at Rs 3,911 crore, against Rs 3,945 in the same period last year. In Q3 FY09, the company’s EBIDTA rose 33 per cent. However, with its strong balance sheet, free cash flow and extremely low level of debt, Bharti has managed to maintain a 40 per cent EBIDTAmargin.

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