Bharti Airtel Q2 results today; here's what top brokerages expect

Telecom major Bharti Airtel is scheduled to announce its September quarter earnings for FY19 on Thursday. The company had reported a 74 per cent drop in its net profit at Rs 973 million for the quarter ended June 30. Revenue had dipped about 9 per cent to Rs 200.80 billion during the same period. 

On a year-to-date (YTD) basis, the company's stock has surged around 11 per cent as compared to about half a per cent rise in S&P BSE Sensex.

Here's a look at what the leading brokerages expect from Bharti Airtel's Q2 results - 

Edelweiss Securities

We estimate Bharti's India cellular business revenues to decline by 1.2 per cent QoQ on account of 6.5 per cent decline in average revenue per user (ARPU). On an organic basis, revenue decline should be nearly 2.5 per cent QoQ. Subscribers base expected to shrink by nearly 4 million QoQ, majorly due to customers opting out of Telenor services. Africa business is expected to remain flat QoQ in US dollar terms and grow 4.2 per cent in rupee terms. Consolidated EBITDA margin expected to decline 220 bps QoQ majorly on account of higher rentals per tower, as Vodafone-Idea exited many towers. Finance cost is also expected to be higher by Rs 5 billion due to unfavourable forex movements.

Motilal Oswal Securities

We expect consolidated revenue to decline 0.5% QoQ (-8% YoY) to Rs 199.8 billion, and consolidated EBITDA to fall 6 per cent to Rs 63.4 billion. India wireless revenue is likely to drop 2 per cent QoQ to Rs 102.7 billion with India wireless EBITDA drop of 15 per cent QoQ to Rs 23.5 billion. We expect Bharti to report a net loss of Rs 2.1 billion. Bharti trades at an EV/EBITDA of 8.7x FY19E and 7.6x FY20E.

ICICI Securities

Bharti's India wireless business is expected to feel the pressure from another round of discounting by Jio in September 2018 coupled with seasonality effect. In contrast, revenue pressure may be mitigated, to some extent, by strong revenue growth from the Africa business, aided by rupee depreciation. India wireless revenues are expected to decline 2 per cent QoQ at Rs 10,270 crore. Given the higher network operating costs (further accentuated by higher fuel costs) and weak top line, we expect nearly 340 bps sequential decline in India EBITDA margins at 28.6 per cent. Africa revenues are expected to grow 5.9 per cent QoQ to Rs 5,593 crore aided by a depreciating rupee. Africa margins are expected to be robust at 36.3%. The consequent consolidated margins are seen at 31.8 per cent, down 170 bps QoQ, mainly impacted by weak India margins.

Emkay Global Securities

India mobile revenue to decline 1.3 per cent QoQ to Rs 103.5 billion, adversely affected by the continued competitive intensity and the partial exit of the low-ARPU customer base of Telenor. India wireless ARPU to remain suppressed (-6 per cent QoQ to Rs 99). MOU and data usage should continue to grow, driven by increasing acceptance of bundled plans. Minutes to grow by 8 per cent QoQ, while data volume is estimated to increase 26 per cent QoQ. Increased network operating charges led by aggressive rollouts; the rise in diesel prices; and the one-month impact of higher tower rentals post-Vodafone-Idea merger should dent India wireless EBITDA. Africa revenue is expected to grow 7 per cent QoQ to Rs 56.7 billion, while EBITDA should increase 8 per cent QoQ to Rs 20.7 billion, with a stable EBITDA margin of 36.4 per cent.