India's leading mobile phone firm by subscribers, Bharti Airtel, reported Wednesday a worse-than-expected 28 percent dive in quarterly net profit, hit by debt charges and foreign exchange losses.
But investors ignored the plunge, focusing instead on the company's stronger operating performance, driving up the company's stock by more than two percent.
The mobile phone operator said net profit slid to 10.06 billion rupees ($191 million) in the three months to March from a year earlier. The figure undershot market expectations that profit would decline to around 12.5 billion rupees.
The fall marked Bharti's ninth straight quarterly profit drop in India's fiercely competitive mobile market, which has over a dozen players.
Interest charges from its $3.2-billion acquisition of faster 3G spectrum and Bharti's $10.7-billion debt-funded purchase in 2010 of the African mobile operations of Kuwait's Zain weighed on earnings.
Foreign exchange losses and tax provisions also dragged down profit.
But revenues climbed 15 percent to 187.29 billion rupees as Bharti's average revenue per user -- a key performance measure -- increased 1.1 percent.
Its number of customers also jumped nearly six million in the final quarter to 181.3 million, double the addition in the previous three months.
"The operating numbers were basically good so this has offset the disappointment over the headline profit," said a Mumbai telecom analyst who could not be named due to his company's policy.
Bharti's shares rose 2.05 percent to 316.65 on the back of the results, outpacing a slightly firmer overall market.
"The year has ended with the company's customer base crossing 250 million across 20 countries," Bharti's billionaire chief Sunil Bharti Mittal said.
The earnings came amidst turmoil in India's telecom market after the Supreme Court this year cancelled 122 second-generation (2G) mobile licences issued in 2008 on grounds the distribution process was under-priced and corrupt.
The telecom regulator has proposed that the government auction the airwaves using a reserve price nearly 10 times the price used in 2008, raising alarm in the sector.
"These rates would be unsustainable for the industry," Bharti managing director Akhil Gupta told reporters, saying they would push up tariffs and threaten India's goal of pushing the mobile phone network across rural areas.
The developments have created uncertainty about the future of India's mobile market, which had been seen as one of the nation's biggest liberalisation success stories and a promoter of economic development.
"The recent regulatory developments in India will have significant implications on the future of telephony and broadband as well as India's global competitiveness," Mittal warned.