GTL Q2 net up 40% on international ops

INCREASED revenues from international operations helped network services provider GTL post a 40% rise in net profit of Rs 42.36 crore during the second quarter ended 30th September 2008. Revenues rose by 25% to Rs 492.44 crore as the company signed up new clients from the Middle East and Africa.
    During the quarter, GTL also won network contracts from Reliance Telecom Infrastructure, Datacom Solutions, Indus Towers, Aircel, Nokia Siemens Networks Indonesia, Saudi Telecom and Ericsson UK, for deployment and services.
    "GTL has also entered into a master authorised services provider (MASP) agreement with Ericsson to provide managed network services in the UK," GTL chairman Manoj Tirodkar said. Despite the global economic downturn, the company has maintained its FY09 revenue guidance of Rs 2,150 crore, a increase of 30% over the previous year.
    The GTL scrip closed at Rs 179.75 on Thursday, up 0.08% over the previous close.
    "There are a lot of orders in hand, but execution is slow as operators have issues regarding acquisition of sites and other factors. We believe that in the shortto-medium term, this trend will continue. Growth in the domestic market may lose momentum. In the medium-to-long term, however, the impact will be positive as operators will look at cutting costs," Mr Tirodkar said.
    With the financial crisis, operators are under tremendous pressure to reduce operation and maintenance (O&M) costs. "O&M and energy management will be the focus areas for us," he said. GTL will, however, go slow on acquisitions. "We will be very careful at this time." Mr Tirodkar hinted the valuations for the infrastructure it agreed to buy in April could be revised downwards.
    Of the total revenues of the company, about 65% comes from India and Mr Tirodkar said the target was to increase the percentage of foreign to 50%. GTL's tower subsidiary, GTL Infrastructure (GIL), currently contributes 43-45% to the revenues. "It could go down to 40% by the year-end."
    Mr Tirodkar said GTL was in active discussions with new operators planning to roll out services, but given the current uncertainty in the market, he did not anticipate any immediate revenue flow from the avenue.