India's VSNL Shares Surge on Strong Earnings Report (Update2)
(Adds comments from VSNL chairman, and earnings details.)
Mumbai, April 29 (Bloomberg) -- Videsh Sanchar Nigam Ltd.,
India's only international phone company, said its profit jumped
39 percent in the year ended March as Indians made more
international calls.
Profit rose to a higher-than-expected 13.4 billion rupees
($313 million), or 141.19 rupees per share for the fiscal year
ended March 31. The 17 analysts surveyed by IBES International
had predicted earnings of 132.53 rupees a share.
''Earnings were generally better than expectations because
of their focus on value-added services like the Internet,'' which
are more profitable, said Sheriar Irani, an analyst at Jardine
Fleming India Broking Ltd. in Mumbai. ''They should be able to
keep up the momentum.''
With a potential market of more than 900 million people and
a monopoly on India's international phone service until 2004,
analysts expect Videsh Sanchar, or VSNL's, profit to climb.
Its earnings will get an extra boost this year once the
government reduces overseas phone rates. The lower rates will
lead to more calls but the amount of money VSNL is paid per
minute by the government will not change.
The company's sales rose 11 percent to 68.27 billion rupees
Internet, Satellite
''This year we will see things pick up,'' with phone
traffic climbing around 21 percent due to lower tariffs and
better economic growth, said Amitabh Kumar, chairman and managing
director of the company.
Total phone traffic rose 15 percent to 1.94 billion paid
minutes in the year ended March.
VSNL will also make more money from its businesses other
than international phone calls, such as the Internet and
satellite phones, Kumar said.
VSNL shares rose 46 rupees, or 7.7 percent, to 645.00 on the
National Stock Exchange.
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