Bharti Airtel rallies 10% on strong operational performance in Q2

Shares of Bharti Airtel moved up 10 per cent to Rs 476 on the BSE in early morning deals on Wednesday, after the company reported strong operating performance with beat on average revenue per user (ARPU), subscriber addition and margins for the July-September 2020 quarter (Q2FY21). 

Bharti Airtel’s India business, monthly ARPU, an important matrix to gauge the telco's performance, rose to Rs 162 from Rs 128 a year ago and Rs 157 in the June 2020 quarter. 4G data customers at 152.7 million were up by 14.4 million for the quarter, the company said in a press release. Ebitda (earnings before interest, taxes, depreciation, and amortisation) margin was up 366 basis points (bps) year on year (YoY) at 46 per cent — the highest in at least five quarters.

“Despite robust data traffic volumes of 7.6b GB (with 16.4 GB/user), data traffic / subscribers are less than 50 per cent of RJio levels. Moreover, the gap in network capacity is significantly smaller, thus highlighting a healthy network capacity and room for improvement. It has a healthy 537k base stations (closer to RJio), with the number of unique broadband towers also at a healthy 199k”, Motilal Oswal Securities said in results flash.

Losses narrow

Bharti Airtel's consolidated net loss for the Q2FY21 has narrowed sharply to Rs 763 crore, a decline of 97 per cent YoY. The company had posted a consolidated net loss of Rs 23,045 crore in the same quarter last year, after provisioning for the adjusted gross revenues (AGR) dues.

The company posted the highest ever quarterly revenue, mainly on account of customer addition and higher data consumption. Revenues increased 22 per cent YoY to Rs 25,785 crore compared to Rs 21,131 crore a year ago. Data consumption grew by 58 per cent YoY, which reflects strong engagement of customers on our network. In India, revenues rose 22 per cent YoY to Rs 18,747 crore.

“Airtel continues to report resilient numbers, especially on Indian wireless business front. The major positive read through is strong subscriber addition and ARPU traction, which percolated into superior EBITDA. The management commentary on tariff hike would be a key monitorable ahead,” ICICI Securities said in a note.