5G-ready Bharti Airtel's profit up sixfold; sees 22.2% revenue growth

Bharti Airtel’s consolidated net profit jumped over 5.6 times year-on-year (YoY) to Rs 1,607 crore in the first quarter of FY23, led by strong revenue growth and 4G customer addition.

Still, the telecom major’s net profit was below the Bloomberg consensus estimate of Rs 2,451 crore. In the same quarter last year, Airtel had posted a net profit of Rs 284 crore. April-June 2022 was the seventh consecutive profitable quarter for Airtel.

The company’s healthy results came ahead of the launch of its 5G services in India later this month.

Airtel’s consolidated revenue from operations during the quarter under review rose 22.2 per cent YoY to Rs 32,805 crore; its average revenue per user (ARPU) grew 2.8 per cent sequentially and by over 25.3 per cent YoY to Rs 183.

Revenue growth got a boost from the 20 per cent hike tariff hike by telecom companies last November.

At the operating level, the company registered 25.9 per cent YoY growth in profit to Rs 16,604 crore, while the operating margin widened by 1.5 percentage points to 50.6 per cent.

Airtel continued to gain market share in the 4G segment and the company added 4.5 million 4G customers in the June quarter. Its total number of 4G customers now stands at over 205 million and they account for 63 per cent of its customer base. The average data usage per customer per month rose to 19.5 GB, against 18.8 GB in the quarter ended March 31, 2022.

The company said it added 8,000 towers in Q1 to augment its coverage and took initiatives to improve network quality and customer experience.

But the company’s net profit was lower on a sequential basis due to a 12.4 per cent increase in finance costs and a 77 per cent drop in the share of profits from associates.

“We continue to deliver strong and sustained growth. The Ebitda margin is now at 50.6 per cent. Our enterprise and home businesses now have strong momentum and delivered strong double-digit growth, improving the diversity of the overall portfolio. Airtel’s strategy of winning with quality customers continues to yield good results with an industry-beating ARPU of Rs 183 crore,” Airtel’s MD and CEO Gopal Vittal said in a statement.

In the spectrum auction that concluded last week, Airtel purchased 19,867.8 MHz of spectrum across various bands. “Specifically on 700 MHz band, we have enough mid-band spectrum to cater to the 5G rollout, and hence have been judicious on acquiring very high-cost sub-GHz spectrum. Our long-term spectrum acquisition strategy has ensured that we are able to offer the best-in-class 5G experience at the lowest cost of ownership with the most power-efficient solution,” the company said. Vittal said the company is well positioned to raise the bar on innovation and is confident of meeting the emerging needs of discerning customers looking for speed, coverage and latency.