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RCom narrows down Q1 standalone loss to Rs252 crore

On a consolidated basis the Anil Ambani-led Reliance Communication reported a 3.1% increase in its net profit at Rs162 crore for the first quarter ended on 30 June 2012

Reliance Communications (RCom) said it has narrowed net loss to Rs252 crore on a standalone basis for April-June quarter compared to a loss of Rs272 crore in the corresponding period a year ago, reports PTI.

 

However, on a consolidated basis the Anil Ambani-led telecom firm reported a 3.1% increase in its net profit at Rs162 crore for the first quarter ended on 30 June 2012.

 

The company had reported a net profit of Rs157 crore for the same period a year ago.

 

The Indian telecom sector is going through a period of stiff competition and changes in regulatory environment, which are putting pressure on margins and profitability.

 

RCom said it continues to be free cash flow positive.

 

“RCom generated operational cash flow of Rs1,650 crore in the first quarter. This is the second full year of positive free cash flow for the company and this trend will continue in succeeding years,” RCom said in a statement.

 

On a standalone basis, the total income dropped to Rs2,794 crore in the first quarter compared to Rs3,002 crore in the April-June quarter in 2011, RCom informed the BSE in a filing.

 

On a consolidated basis, its total income during April-June 2012 grew by 8.5% to Rs5,264 crore compared to Rs4,849 crore posted in the same period in the previous financial year.

 

“We are happy to share a satisfying quarterly performance in a very tough competitive environment...we have been able to report very stable EBITDA margin of 31%, which is the highest in industry,” RCom President and CEO Gurdeep Singh told PTI.

 

“We want to express that we have been successful in achieving revenue per minute stability now consecutively for nine quarters, in spite of intense competition and over supply of minutes in the industry. We continue to lead data growth in the industry,” he added.

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Deutsche Bank downgrades SBI to ‘hold’ on poor asset quality

The investment bank cautioned that PSU banks like State Bank of India, which have a greater exposure to SME advances, are more susceptible to non-performing advances than private banks on account of uncertain monsoon and economic outlook

 
Deutsche Bank has downgraded India’s largest public sector lender, State Bank of India (SBI), to ‘hold’ from ‘buy’ stating that June quarter was one of the worst quarter for the PSU bank due to its poor asset quality, according to a media report.
 
Deutsche added that the decline in SBI’s interest margin to 3.57% in the June quarter, down 18 basis points, is not expected to help the bank much in boosting its asset quality.
 
The global investment bank cautioned that PSU banks, which have a greater exposure to SME advances, are more susceptible to non-performing advances than private banks. This is on account of uncertain monsoon and economic outlook, Deutsche added.
 
Meanwhile, Morgan Stanley maintained SBI at ‘underweight’, and cut its target price to Rs1,390 from Rs1,425 citing weak trends in margins and non-performing loans in a report dated Sunday.
 
SBI was trading down 0.21% at Rs1,883.95 on the BSE in post-noon trade. 
 

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