Post its split with Bharti, Walmart's earnings to be affected

American retail giant Walmart will have to bear higher expenses because of its split with

Indian joint venture partner Bharti Enterprises. Various charges, including those related to India joint venture, would also be impacting its quarterly as well as full-year earnings.

Walmart and Bharti Enterprises mutually decided to part ways in October last year, bringing an end to their six-year long partnership in India. They then decided to independently own and operate separate business formats in the country. With respect to the India transaction, the retailer has said in a statement that it has terminated the franchise and supply agreements related to retail stores. “The estimated charge for this transaction is now approximately 0.05 dollars (Rs 3.13) per share versus the previous estimate of 0.04 dollars (Rs 2.50) per share,” the company mentioned in a statement on 31 January.

The Company now anticipates that its underlying EPS (earnings per share) for the fourth quarter of fiscal 2014 will be at or slightly below the low end of its range of 1.60 dollars (around Rs 100) to 1.70 dollars (about Rs 106). For the full year, the underlying EPS is expected to be at or slightly below the low end of the 5.11dollars (Rs 319.4) to 5.21 dollars (Rs 326.1) range.

Walmart has registered a new company called ‘Wal-Mart India Private Ltd’, clearly signaling its plans of entering the country in near future. After parting ways with Bharti Group in October last year, Walmart was keenly studying the multi-brand FDI policy before formally announcing its further India plans. In December 2013, Walmart received the green signal from the Competition Commission of India (CCI) to purchase Bharti group’s 50 percent stake in their Indian joint venture for wholesale stores business. Walmart has been lobbying with American lawmakers since 2008 for facilitating its entry into the Indian market, according to lobbying disclosure reports filed by the company in the US.