Airtel Q3 profit up 54.8% at ₹2,442 cr, Arpu rises 7.7%

Bharti Airtel's consolidated net profit in the quarter ended December rose nearly 55% year-on-year to ₹2,442 crore, helped mostly by subscriber additions and a rise in average revenue per user.

India’s second-largest telecom operator by subscribers posted revenues of ₹37,900 crore during the quarter, up 5.9% from the same period year, backed by a strong and consistent performance by India operations, which recorded quarterly revenues of ₹27,811 crore, up 11.4% year-on-year.

However, a devaluation of African currencies impacted the company's consolidated numbers for the quarter.

“Revenue from India business sustained its momentum and grew sequentially by 3%, while the consolidated revenue was impacted by the devaluation of the Nigerian Naira and Malawian Kwacha," Bharti Airtel managing director Gopal Vittal said.

Airtel reported a one-time charge of ₹130 crore coming from foreign exchange losses due to the currency devaluations. The Africa business reported a 92% fall in net profit to $15 million, with finance costs more than doubling to $352 million.

Mobile services revenues from India operations rose 11.8%, led by 4G and 5G customer additions of 28.2 million year-on-year and 7.4 million quarter-on-quarter. 4G customers account for 71% of the company's total customer base of 345 million. The Sunil Mittal-promoted carrier said that it had added 0.9 million post-paid customers in the quarter.

The average revenue per user, or ARPU, a key metric of profitability, bettered market expectations at ₹208 per month, up 7.7% y-o-y and also higher than ₹203 it posted in the quarter ended September 2023, helped by acquisition of high-value customers and improved realizations. Airtel’s ARPU remains the highest among competitors Reliance Jio, which has the largest customer base but has an ARPU of ₹181.7, and No. 3 carrier Vodafone Idea that reported ARPU of ₹142 in the December quarter.

“Even at this ARPU, our return on capital employed, however, continues to be low at 9.4%. To ensure industry health, tariff repair is extremely critical,” Vittal said.

Its India business posted Ebitda of ₹14,985 crore, and Ebitda margin at 53.7%, up 1.1 percentage points from the same period last year. Capital expenditure for the quarter was at ₹7,756 crore, as the carrier continued to expand its 5G coverage across the country. It rolled out more than 12,300 towers in the quarter to strengthen network coverage, taking the number of towers rolled out in the past 12 months to more than 45,000. Airtel aims to complete pan-India 5G coverage by March.

Last month, the carrier acquired a 97.1% stake in Beetel Teletech along with its 49% stake in Dixon Electro Appliances, as part of the company’s strategy to enable indigenization initiative within ecosystem of telecom products, and in line with the government’s policy of ‘Make in India’.

The carrier’s ‘Homes and DTH’ business saw a good uptake, with revenues from homes or fixed-line telephone and broadband services for homes in 1,267 cities growing 23% on-year to ₹1,272 crore, and DTH business adding 388,000 subscribers, the highest in the last 12 quarters. Its enterprise business grew 9% year-on-year to ₹5,194 crore.

Net debt from India operations stood at ₹1.74 trillion, down marginally from ₹1.79 trillion in December 2022.