Bharti Airtel reports consolidated net profit of Rs 759 crore in Q4

Bharti Airtel on Monday reported a consolidated net profit of Rs 759 crore in the fourth quarter of 2020-21, after provisioning for the adjusted gross revenue (AGR) payment due to the central government.

The telecom operator had posted a loss of Rs 5,237 crore in the corresponding period of 2019-20. In the third quarter of FY21, the company had posted a consolidated net profit of Rs 854 crore, helped by an one-time gain from the merger of Indus Towers.

“Our mobile revenues grew at 19.1 per cent YoY backed by 13.7 million 4G customer additions. We are seeing strong momentum in our home business with 274,000 net adds. The enterprise segment delivered double-digit growth. Our digital assets continue to scale and we are beginning to see strong traction in monetisation of these assets,” said Gopal Vittal, managing director and chief executive officer, India & South Asia.

Operationally, the performance was largely in line with street expectations.

The company's revenues stood at Rs 25,747 crore, up 17.6 per cent YoY on a comparable basis and 11.9 per cent on a reported basis. According to Bloomberg poll, analysts were expecting India’s second largest telecom operator to post revenue of Rs 26,165 crore. Ebitda or earnings before interest, tax, depreciation and amortisation stood at Rs 12,583 crore, up 28.9 per cent YoY, leading to an improvement of 647 basis point (bp) YoY and 300 bp sequentially in margins to 48.9 per cent. Analysts at Kotak Institutional Equities (KIE) and Motilal Oswal Securities were estimating the margins at 47 per cent and 47.9 per cent, respectively. 

Net profit though fell short of the estimate of Rs 959 crore.

“During the quarter, the company continued to recognise its AGR obligations based on the court judgment and guidelines/clarifications received from the Department of Telecommunications in respect of licence fees and spectrum usage charges,” Airtel said in the statement.

The India business accounts for over 70 per cent of Airtel’s revenue, and within India the Mobile business is about three-fourth of revenue.

In the Mobile India business, Bharti Airtel's average revenue per user (ARPU), the matrix that measures the revenue generated per unit or subscriber, stood at Rs 145 down from Rs 166 sequentially and Rs 154 in the year ago period.

For Jio, its ARPU declined to Rs 138.2 in Q4FY21 from Rs 151 from the December quarter. The point to note here is that telecom companies used to pay an IUC (interconnect usage charges) of six paise per minute for calls made from their network to other service providers. The IUC was discontinued from January 1, 2021 on orders of telecom sector regulator and this led to a drop in ARPU.

On a comparable basis, Airtel’s ARPU has seen a marginal drop from Rs 146 in the December 2020 quarter but higher than Rs 135 in the year ago period. Brokerages like KIE, however, had forecasted it at Rs 154 per month. The company’s India business revenues increased by 17.5 per cent year-on-year to Rs 18,338 crore, on a comparable basis and 9.6 per cent on a reported basis.

Mobile revenues grew 19.1 per cent YoY on account of improved realisations as well as strong customer addition.

Airtel’s 4G data customers increased 31.5 per cent YoY to 179.3 million, an addition of 43 million 4G customers over the last four quarters. Average data usage per data customer was 16.4 gigabytes a month while voice usage was at 1,053 minutes a customer a month.

The company’s capex spend for the quarter stood at Rs 6,846 crore, including Rs 5,141 crore in India business.

The net exceptional gain of Rs 440 crure during the quarter ended March 2021 comprises of gain on account of reversal of impairment of intangible assets of Rs 643.6 crore, charge on account of re-assessment of the useful life of certain categories of network assets due to technological advancements of Rs 116.2 crore and net charge on account of re-assessment of contractual / regulatory levies and taxes of Rs 87 crore.

Net debt-Ebitda, an important leverage parameter, has been inching lower in the past two quarters. It was 2.95 per cent in the March 2021 quarter, down from 3.03 per cent in the previous quarter and 3.18 per cent in the September 2020 quarter.

Airtel added 630,000 post-paid customers this quarter and 1.9 million over the past four quarters. It rolled out an additional 8,300 towers in the quarter.

For the full year ending March 2021, consolidated revenues at Rs 100,616 crore were up 18.8% YoY, while EBITDA at Rs 46,139 crore was up 32.7 per cent YoY. Net loss was down 53 per cent YoY at Rs 15,084 crore. This is the first time Airtel's annual revenue crossed the Rs 1 trillion mark.