After a four-quarter struggle to boost its revenues past the Rs 10,000 crore to

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Rs 11,000 crore range, Bharti Airtel, the largest listed telecom company in India, declared revenues of Rs 12,231 crore in the quarter ended June 30, 2010.

The 13.9 per cent revenue growth is the highest quarter-on-quarter rise in the past 12 quarters.

But Bharti disappointed the market with an 18.5 per cent drop in net profit, the largest quarter-on-quarter fall out of three declines in the past six quarters.

As a result, the company’s share price on the National Stock Exchange fell around 3 per cent in early Wednesday trading before recovering partially to end the day down 1.5 per cent at Rs 320.65 from Tuesday’s close of Rs 325.50.

“The margins and profitability were slightly below our expectations,” said Bhavesh Gandhi, research analyst at India Infoline.

The last time Bharti's net profit registered a bigger quarter-on-quarter fall, as per Capitaline data, was in September 2008 when its revenues fell by 22.4 per cent to Rs 1,715 crore. Its net profit in the June quarter is also the lowest since December 2007.

But the company management was not concerned with the fall in profit. In a telephone conference with Indian and overseas analysts, Bharti's CEO Sanjay Kapoor said, “Despite competitive pressures, were are able to grow our revenues in the last quarter.”

The biggest portion of Bharti's revenues came from mobile services in India and South Asia (Rs 8,823 crore), followed by passive infrastructure services (Rs 2,041 crore), enterprise services (Rs 1,018 crore) and mobile services in Africa (Rs 958 crore).

Atul Bindal, president of mobile services at Bharti, told analysts in the tele-conference, “We saw strong consumption in the last quarter as discerning customers came back and we did not see any irrational price war among telecom players.”

In the June quarter, Bharti had to provide for two large funds outgo -- licence fees of Rs 12,295 crore for 3G spectrum in 13 circles and Rs 3,314 crore for broadband and wireless access (BWA) in four circles, and $10.7 billion, or about Rs 49,000 crore, to buy Zain group, an African telecom company. Bharti had to borrow from banks and other lenders to provide for these funds.

The borrowing to finance the acquisition of Zain contributed to an overall interest payment of Rs 249 crore. The interest cost on borrowing for 3G and BWA licence fees came to Rs 46 crore. Bharti’s profit was further lowered by an accounting loss of Rs 216 crore on account of foreign exchange fluctuations and derivatives.

Bharti also became the third Indian-listed company to report its June quarter results using the International Financial Reporting Standards (IFRS). Infosys Technologies and Wipro are the other two companies to do so. Infosys had also reported its 2009-10 results using IFRS and Indian accounting standards.