BackAirtel Q3 profit trails Street forecast despite 91% surge
Average revenue per user at industry high of ₹193 due to focus on premiumization, quality usersAirtel’s revenue rose by more than 20% to ₹35,804 crore in Q3 as it added new 4G customers
PremiumNew Delhi: Bharti Airtel Ltd’s quarterly profit missed analysts’ estimates even as earnings nearly doubled from a year earlier despite a one-time charge of ₹501 crore.
Net profit rose 91% to ₹1,588.2 crore for the quarter ended 31 December from ₹829.6 crore in the year earlier. The figure lagged the ₹2,115 crore consensus estimate in a Bloomberg survey of analysts. Profit fell 26% from ₹2,145 crore in the September quarter.
Revenue rose by more than 20% to ₹35,804 crore as it added new 4G customers and posted growth in postpaid and enterprise segments. It increased by 3.6% from ₹34,526 crore in the preceding September quarter.
The telco’s India revenue rose 19% to ₹24,962 crore, while revenue from the mobile business grew by 21% to ₹19,352 crore owing to improved realization, and strong customer additions.
The Sunil Bharti Mittal-promoted telco’s average revenue per user (Arpu)—a key measure of profitability—was ₹193 for the quarter, the highest for the quarter including market leader Reliance Jio and No. 3 carrier Vodafone Idea, on the back of focus on quality customers and premiumization. The Arpu was ₹163 in the same quarter last year, and ₹190 in the September quarter.
“We have delivered another quarter of consistent and competitive growth across all our businesses," said Bharti Airtel managing director Gopal Vittal, who also noted that the carrier had set up 8,600 towers last quarter to improve network and quality of services.
Airtel said it incurred an exceptional charge of ₹669.8 crore, which came to ₹501.2 crore after tax, in the quarter on account of provision for license fee payment related to earlier periods in one of the group’s wholly-owned subsidiaries.
Earnings before interest, taxes, depreciation and amortization (Ebitda) jumped 25% from a year earlier to ₹18,601 crore, while margins expanded by 1.1 percentage points to 52% in the quarter. India mobile services’ Ebitda improved to 53.8% last quarter from 49.3% a year earlier.
The carrier’s net debt stood at ₹2.09 trillion during the quarter, rising sharply from ₹1.66 trillion in the September quarter.
Airtel’s free cash flow dropped to ₹9,287 crore in the quarter as the company increased its capital expenditure. During the quarter, capex spending rose sharply to ₹9,313 crore from ₹6,101 crore, as the carrier continued to advance capex for expansion of its 5G services across the country.
“Our 5G rollout is on track to cover all towns and key rural areas by March 2024," Vittal said. Airtel was the country’s first telecom operator to roll out 5G services starting with its launch in eight cities, including the metros in October last year.
The carrier said its Home business added 432,000 customers during the quarter to reach to a total base of 5.6 million on the back of its asset-light local cable operator partnership model. Airtel is currently present in over 1140 cities through this model.
Airtel Business led industry with 16.4% growth in revenue from a year earlier by leveraging the converged portfolio of Airtel and harvesting the rapidly increasing demand for data and connectivity related solutions. The Digital TV business has added 214,000 customers, the most in eight quarters in a challenging industry, the company said.
“Our strategy of winning quality customers has helped us add 6.4 million 4G customers and exit the quarter with an industry leading Arpu of ₹193. Postpaid, Enterprise, Homes as well as our Africa business sustained their momentum while the DTH business showed signs of growth in an industry that continues to be under pressure. Our overall performance is testimony to the breadth and diversity of our portfolio that spans across both geographies as well as businesses," Vittal said.
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