Bharti Airtel posts net profit of Rs 284 cr in Q1, misses street estimates

Operating performance saw improvement and was ahead of expectations

Bharti Airtel on Tuesday reported a net profit of Rs 283.5 crore in the first quarter (Q1) ended June 30 of 2021-22. This was much lower than the consensus estimates, which had pegged the same at Rs 604 crore. The company had reported a loss of Rs 15,933 crore in the year-ago quarter on account of a one-time provision for dues related to adjusted gross revenue. 

The June quarter profit was aided by the sale of tower assets in Africa for $175 million (Rs 1,279.6 crore). On a sequential basis, the reported profit was down 63 per cent. But, the highlight was the operating performance.

“Our consolidated revenue at Rs 26,853.6 crore grew by Rs 1,106 crore over the last quarter, representing sequential growth of 4.3 per cent, while the earnings before interest, tax, depreciation, and amortisation (Ebitda) margins improved from 48.9 per cent to 49.1 per cent. While our wireless revenue was impacted by the Covid lockdown-induced slowdown, in terms of device shipments and a financial squeeze at the lower end of the market, our overall performance reflected the resilience and strength of our portfolio," said Gopal Vittal, managing director and chief executive officer, India & South Asia. 

Revenues were marginally higher than Street expectations of Rs 26,247 crore. Shares of Airtel closed at Rs 580, up 2.68 per cent from the previous close. At the operating level, the consolidated Ebitda in Q1 came in at Rs 13,189 crore - up 30 per cent year-on-year (YoY). Margins improved by 570 basis points YoY to 49.1 per cent, the highest ever for the company, according to Bloomberg data. Analysts were estimating an Ebitda of Rs 12,676 crore, and margin of 48.3 per cent. The operating free cash flow (Ebitda minus capital expenditure) at Rs 6,599 crore was also the highest in at least five quarters.

“We added 5.1-million 4G customers during the quarter and our enterprise business in India continued to deliver strongly. Our Home business grew by just about 13 per cent over last year and added 285,000 customers in the quarter — the highest ever," added Vittal. Africa announced the sale of tower assets belonging to Airtel Tanzania in June. Around $60 million from the proceeds will be used to invest in network and sales infrastructure in Tanzania. The rest will be used to reduce debt at the group level.

Net debt was up 7.5 per cent sequentially to Rs 1.60 trillion, and 30.7 per cent YoY. 

In the India mobile business, Airtel's average revenue per user - the matrix that measures the revenue generated per unit or subscriber — stood at Rs 146, up 0.6 per cent on a sequential basis (Rs 145), while it was down 7 per cent, from Rs 157 in the year-ago period.

The firm said it has deployed additional spectrum across the 900, 1,800, 2,100, and 2,300-megahertz bands in multiple circles during the quarter to improve network availability and data speeds, delivering the best network experience to its customers. The India business posted quarterly revenue of Rs 18,828 crore, an increase of 19 per cent YoY on a comparable basis, while the mobile services revenue was up 21.9 per cent YoY on a comparable basis on account of improving realisations and sustained increase in 4G customer base. According to Trai data, Airtel added over 517,000 subscribers in April and lost 4.6 million of them in May due to the second wave and resultant lockdowns.