Bharti Airtel trades firm, up 1% post March quarter results

Strong 4G and postpaid subscriber additions along with healthy FCF generation were the key highlights in Q4.

Shares of Bharti Airtel were trading firm, up 1 per cent at Rs 797.40 on the BSE in Wednesday’s intra-day trade after the telecom services provider reported a 14.3 per cent rise in its revenue for the quarter that ended March 31 (Q4FY23), to Rs 36,009 crore from Rs 31,500 crore in the same quarter in 2021-22 (Q4FY22). Its India business reported a 12.2 per cent YoY rise in the revenue to Rs 25,250 crore.

The company reported a 49.2 per cent year-on-year (YoY) jump in its consolidated net profit to Rs 3,005.6 crore.

Reported consolidated earnings before interest, taxes, depreciation and amortization (ebitda) grew 17.6 per cent YoY to Rs 18,807 crore; Ebitda margin improved 144 bps YoY at 52.2 per cent aided by broadband and enterprise margins improvement. India business posted Ebtida of Rs 13,403 crore, Ebitda margin at 53.1 per cent; was up 225 bps YoY. 

Bharti Airtel said average revenue per user (ARPU) for the quarter stood at Rs 193 as compared to Rs 178 in Q4’22 on the back of continued focus on acquiring quality customers and delivering enhanced customer experience.

ARPUs at Rs 193 were expectedly flat QoQ (+8 per cent YoY) despite 2 fewer days in Q4 partly due to an improving subscriber mix (postpaid and data subscriber addition at an 8-quarter high), and partly due to the increase in voice tariffs in Q4. READ MORE

Rise in ARPUs was the key driver for the 12 per cent YoY growth in India Mobile revenues. Bharti's net subscriber additions remained healthy at 3.2m - 2nd highest in 8 quarters - due to lower churn. India Mobile margins were flat QoQ at 54 per cent in line with expectations, analysts at Jefferies said. It maintained ‘Buy’ rating on Bharti Airtel with price target of Rs 900 per share.

“Bharti's 4Q revenues/EBITDA were in line but profits were ahead of estimates. Strong 4G and postpaid subscriber additions along with healthy FCF generation were the key highlights in 4Q. Growth in homes and enterprise business remains strong. We tweak our revenue/EBITDA estimates and expect Bharti to deliver 16/17 per cent revenue/EBITDA CAGR over FY23-25,” the brokerage firm said in result update.

While the quarter was muted on some fronts, Airtel continues to report a decent performance on India wireless business front with resilient and industry leading KPIs in terms of India post-paid/4G subscribers, margins and cash flow generation (despite elevated capex). The management commentary on overall growth drivers would be key monitorable ahead, ICICI Securities said in a note.

Meanwhile, in past six months, Bharti Airtel underperformed the market by falling 6 per cent, as compared to 0.14 per cent rise in the S&P BSE Sensex.