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Airtel’s Q4 net profit zooms as tariff hikes take effect

Gopal Vittal, managing director and chief executive officer, India and South Asia. For the full year, net profit rose 128% to  ₹4,255 cr from a loss of  ₹15,084 cr in FY21 (Photo: Mint)Premium
Gopal Vittal, managing director and chief executive officer, India and South Asia. For the full year, net profit rose 128% to 4,255 cr from a loss of 15,084 cr in FY21 (Photo: Mint)

  • Telecom firm reports 164% growth in March quarter net profit on higher average revenue per user
  • Airtel recorded a 22.3% growth on-year in consolidated revenue to 31,500 cr for the quarter

NEW DELHI : Bharti Airtel Ltd posted a net profit of 2,008 crore for the quarter ended March, a massive 164% growth over the same quarter last year, as the full flow of tariff increase took effect and its 4G customers crossed the 200-million mark. Profit jumped 142% from 829 crore in the December quarter.

The Sunil Mittal-promoted carrier recorded a 22.3% growth on-year in consolidated revenue to 31,500 crore for the quarter, while revenue from its India business rose 22.7% to 22,500 crore.

India’s second-largest telecom operator’s average revenue per user—a key measure of profitability—was 178 for the quarter, the highest among its rivals. It was 22.7% more than 145 in the same quarter last financial year, and 9.2% more than 163 in the December quarter. This led to a more than 25% jump in mobile revenues to 17,616 crore, from 14,078 crore in the same quarter last year.

“This has been another quarter to cap a full year of consistent and competitive performance across our portfolio. Our consolidated revenues for the quarter grew by 5.5% and Ebitda margins expanded to 50.8%, underscoring our focus on all round delivery. The mobile business revenues were up 9.5% as we saw the full flow through of tariff increase," said Gopal Vittal, managing director and chief executive officer, India and South Asia.

Airtel and other players raised tariffs last November for pre-paid users who form the bulk of the industry’s overall subscriber base. Airtel had said that industry average tariffs should be more than 200 per user per month in the near term and more than 300 for sustainable financial health of the industry.

“Our strong balance sheet and cash flows have enabled us to further repay some of our spectrum liabilities ahead of schedule and improve our leverage," Vittal said.

The carrier made advance payments of 8,815 crore towards deferred liabilities pertaining to 2015 spectrum instalments, due in FY27 and FY28. Over the last four months, Airtel has cleared 24,334 crore of its deferred spectrum liabilities, much ahead of scheduled maturities.

The carrier’s earnings before interest, taxes, depreciation and amortization (Ebitda) stood at 15,998 crore for the quarter ended March, up 27% from 12,583 crore a year earlier. Incremental Ebitda margins across businesses remained healthy, with India mobile services’ Ebitda improving from 47.5% in the March quarter of FY21 to 50.6% in the same quarter of FY22. Consolidated Ebit jumped 44.9% on-year to 7,315 crore.

The carrier said consolidated net income before exceptional items for the quarter was at 1,860 crore, which came to 2008 crore after inclusion of net exceptional gain of 906.2 crore during the quarter ended March 2022.

The exceptional gain came from the sale of tower assets of 759.3 crore, settlement with a strategic vendor of 992.3 crore, charges on account of provision of levies of 321.6 crore, charges on account of impairment of property, plant and equipment of 381 crore and charges on account of prepaying bonds of 142.8 crore.

For the full year, Airtel’s net profit rose 128% to 4,255 crore from a loss of 15,084 crore in FY21, while revenue grew 15.8% to 1.16 trillion. India mobile revenue was up 14% to 63,205 crore in FY22. Ebitda for FY22 was nearly 26% up to 58,110 crore from 46,139 crore in FY21.

However, its net debt increased by 8% to 1.6 trillion in FY22 from 1.48 trillion in FY21. In the quarter ended December, the carrier’s net debt stood at 1.59 trillion.

Airtel’s free cash flow was at over 10,000 crore on a consolidated basis for the March quarter, rising from 8,803 crore in December. For the full year, free cash flow stood at 32,448 crore, up from 21,970 crore.

During the quarter, the carrier rolled out nearly 7,000 towers for ubiquitous network experience. Total capex spend for the quarter was 5,997 crore, down from 6,101 crore in the previous quarter. For the full year, the carrier’s capex stood at 25,661 crore, up from 24,168 crore.

Finance costs were up marginally to 3,858 crore for the quarter ended March, but were up 11% to 14,801 crore for full FY22.

Airtel acquired additional 4.8% stake in Indus Tower, increasing its total holding to 46.5%.

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