Bharti Airtel back in black after 18 months with Rs 854 cr net profit in Q3

Robust addition in user base a key driver; highlight of the quarter was 13 million 4G customers added in Wireless business, say firm

Nearly 18 months after it slipped into red, Bharti Airtel on Wednesday bounced back by reporting a net profit of Rs 854 crore for the third quarter ended December 31, 2020, helped mainly by a robust addition in its user base.

“Despite the unprecedented volatility that we have confronted through the year, we delivered another strong performance this quarter. This consistency in performance was across every part of our portfolio, as reflected in market share growth across all our business segments. The main highlight of the quarter was the 13 million 4G customers we added in our Wireless business. As a result, we grew our revenues by 25% over the same period last year and margins expanded,” Gopal Vittal, MD and CEO, India & South Asia, said.

Total revenues of the company stood at Rs 26,518 crore, up 24.2 per cent from last year. The company's revenues were Rs 21,344 crore a year ago. The revenues rose mainly on account of higher customer addition and increased data consumption.

The average revenue per user (ARPU), an important matrix to gauge the telecom firm's performance, rose to Rs 166 from Rs 135, a year ago. Mobile revenues grew by 32.4 per cent YoY on account of the improved realisations as well as strong customer addition.

 

The consolidated EBITDA margin was 45.9 per cent, up 464 basis points (bps) on a year-on-year (YoY) basis.

The company’s India revenues rose 25.1 per cent to Rs 19,007 crore and its mobile services India revenues rose 32.4 per cent YoY.

Bharti Airtel shares closed at Rs 608.80, up 1.53 per cent on the BSE on Wednesday.

The analysts have a positive outlook of the stock. “We think 5G deployment for commercial use is still more than a couple of years away as spectrum availability and ecosystem development would take much longer, while 4G still has a long way in fulfilling its true potential,” Motilal Oswal Financial Services had said.

The growth in the reporting quarter is mainly on account of addition in 4G customer base of the company, which has been on the upward trajectory for almost a year.

According to the official statement, 4G data customers increased by 33.8% YoY to 165.6 Mn compared to the previous year. Over the last 4 quarters, the company has added 42 million 4G customers to its network.

 

As far as the postpaid user base is concerned, the company has said it sees a strong traction in the segment as it added 700,000 post-paid customers this quarter.

Homes business segment witnessed a revenue growth of 2.3% YoY with highest ever customer additions of 215,000 during the quarter to reach to a total base of 2.79 million. We re-calibrated our offering and launched Xstream bundles with content and unlimited internet to accelerate penetration. The company continued to scale up the LCO partnership model to expand its footprint in non-wired cities, extending the model to over 120 cities.

The Net Debt-EBITDA ratio (annualized) and including the impact of leases as on December 31, 2020 is at 3.03 times as compared to 3.40 times as on December 31, 2019. Excluding pending Adjusted Gross Revenue (AGR) dues, the Net Debt-EBITDA ratio (annualized) is at 2.52 times as on December 31, 2020, the official statement said.

The current net debt of the company stands at Rs 1.25 trillion.