INDIA BUSINESS WORLD - MAY 2006
THE MONTH THAT WAS...

RCOVL NET UP 42% AT RS 440 CR

  RELIANCE Communications Ventures (RCoVL), the telecom arm of the Anil Dhirubhai Ambani Group (ADAG), has posted 42% q-o-q jump in net profit to Rs 440 crore during the quarter ended March 31 ‘06 as subscriber numbers grew and margins expanded. The TELCo, with 20m subscribers, registered revenues of Rs 2,970 crore during January-March ‘06. Beginning June 12, it will replace Tata Power in the sensex, which features 30 blue chip companies.

As per the unaudited proforma consolidated financial results of RCoVL and its operating entities — Reliance Infocomm, Reliance Communications Infrastructure (RCIL), Reliance Telecom (RTL) and FLAG Telecom (FLAG) — EBITDA stood at Rs 1,042 crore, a growth of 23% over the previous quarter ended December 31, ‘05. EBITDA margin moved up from 28% to 35% sequentially.

The company had total assets of nearly Rs 26,000 crore and net worth of Rs 11,742 crore as at March 31, ‘06. Its outstanding net debt was Rs 3,293 crore.

The current fiscal for the RCoVL will be for 15 months, from January 1, 06 to March 31, ‘07. Reliance Communication Ventures ended 6.44% up at Rs 320 on Saturday. The shares have risen 6.1% over the week and 3.6% over the month. “In the interests of better disclosure and to assist investors in understanding overall performance of RCoVL, the proforma numbers have been prepared as if the proposed corporate reorganisation (previously announced) had been implemented for the quarter,” the company said in a statement in Mumbai.

The proforma numbers are based on conservative accounting methodology, whereby revenues during the quarter from Lifetime Free Incoming plans have been deferred over a period of 46 to 65 months, it added.

In a reshuffle of Bombay Stock Exchange (BSE) indices, the stock exchange has revised the composition of various indices such as the sensex, BSE-100, BSE-200, BSE-500, BSE Mid-Cap and BSE Small-Cap.

In the Sensex, which features 30 blue-chip companies, RCoVL will now replace Tata Power.

Replacements in the BSE Mid-Cap and BSE Small-Cap index will be effective from May 15, while replacements in the sensex and other indices will come into effect from June 12. The reshuffle has resulted in the entry of RCoVL, the second telecom firm after Bharti Tele-ventures, to have a place in the Sensex. RCoVL would be the second Anil Dhirubhai Ambani Group (ADAG) company after Reliance Energy to find a place in the index. Major inclusions in the BSE -100 are Bajaj Hindustan, Balrampur Chini, besides Bharat Earth Movers, Jet Airways and Reliance Natural Resources . Some major exclusions are Biocon, Great Eastern Shipping, Jindal Steel and Shipping Corporation of India.