Bharti Airtel Surges Up 4% after Robust Q3 Earnings and Growth in ARPU

Bharti Airtel Surges Up 4% after Robust Q3 Earnings and Growth in ARPU
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Bharti Airtel’s Q3 net profit fell short of expectations, but its revenue met the Street’s estimate. Despite challenges from forex losses, the company’s operational performance improved on a yearly basis. In the opening trade on February 6, shares of Bharti Airtel surged by almost 4 percent following the announcement of robust Q3 earnings.

By 9:22 am, Bharti Airtel’s shares were trading at Rs 1,135.50 on the NSE. The company’s consolidated net profit for the October-December quarter stood at Rs 2,442.2 crore, reflecting a 54 percent increase from the corresponding quarter the previous year. Nevertheless, it fell short of industry estimate of Rs 3,308.50 crore.

In Q3, the revenue reached Rs 37,900 crore, marking a 6 percent increase from the Rs 36,062 crore reported a year ago. The company’s revenue aligned with the Street’s expectations.

Gopal Vittal, the managing director of Bharti Airtel, commented, “Revenue from the India business maintained its momentum and grew sequentially by 3 percent, while the consolidated revenue was affected by the devaluation of the Nigerian Naira and Malawian Kwacha.”

However, the Average Revenue Per User (ARPU) stood at Rs 208, compared to Rs 193 last year, supported by the consistent strategy of acquiring high-value customers and improved realizations. The ARPU for Bharti Airtel also aligns with the analyst estimate of Rs 205.

In Q3, the telecom company expanded its customer base to 48.3 million, maintaining a strong market share of 4G/5G customers. Bharti Airtel also witnessed an addition of 28.2 million 4G/5G data customers to its network, marking a 13.0 percent increase year-on-year.

The company experienced an enhancement in its EBITDA margin across its Indian businesses, increasing to 53.9 percent in Q3 from 52.7 percent in the corresponding period. The improved margins were attributed to enhanced operating leverage and cost efficiencies resulting from its ‘War on Waste’ program.

Morgan Stanley, a brokerage firm, identifies the improved revenue from the India mobile business and EBITDA, driven by a better subscriber mix, as the key highlights of the Q3 earnings. The firm maintains an ‘equal-weight’ recommendation on the stock with a price target of Rs 1,015.

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