Bharti Airtel Q1 results released!

Bharti Airtel Q1 results released!

Last updated: 30 Jul, 2020 | 09:33 am

Bharti Airtel Q1 results released!

Losses widen on AGR provisions

  • The company further provided ₹10,744.4 crores, including interest, toward its balance AGR dues of ₹25,976 crores, thus Net loss (after exceptional items) for Q1’21 stood at ₹15,933 crores as compared to a Net loss of Rs. 28,660 crores a year ago. 
  • As per the latest hearing, the Supreme Court has refused to entertain any request for re-assessment of AGR dues, thus the company stated that it being prudent has made such a massive provision.

Recovery in ARPU(Average Revenue Per User) continues: 

  • Airtel’s ARPU remained in an uptrend for the eighth consecutive quarter, for Q1’21 it stood at ₹157 vs the lows of ₹100 in 2019 during the intense telecom price war started by Jio’s entry into the sector.
  • The rise in ARPU  is led by the full impact of tariff hikes in the previous quarter alongside a continuing focus on quality customers. 
  • Airtel’s ARPU continues to be the highest in the Indian telecom sector. It’s arch-rival Reliance Jio reported an ARPU of ₹130 with Vodafone-Idea’s figure ₹121 in the March quarter (Current Qtr results are pending)

Growth in business metrics

  •  4G data customers were up by 43 Mn. through the year witnessing a growth of 45.3% YoY to reach 138.3 Mn in Q1’21.
  • Alongside a strong Mobile data traffic growth of ~72.7% YoY , the highest ever data usage per subscriber of 16.3 GBs/month was recorded in the quarter.
  • However, customer base growth in India remained muted with India’s YOY growth of 1.4% and a QOQ growth of -1.3%. For Africa YOY growth was at 11.8% and QOQ growth of 0.8%.IN South Asia the company’s customer base was up by 10.6% YOY with a 2.8% fall on QOQ basis. 
  • Besides this, the company entered with an agreement with Carlyle which will acquire approximately 25% stake in Airtel’s Data Center business at a valuation of US$1.2 billion. Verizon and Airtel partnered to bring secure enterprise-grade BlueJeansVideo Conferencing to India

The telecom sector has been benefited by the Covid-19 crisis given the surge in demand for telecom services as a result of digitization of workplaces and business. 

Bharti is expected to benefit the most from the revival in industry revenues due to a strong spectrum footprint, robust balance sheet, and strong execution. 

For the June quarter, Airtel has performed well in operational terms and is expected to continue to do so in the near future. 

The most sticky point for the company remains on the payment of AGR dues. The decision on the request by Airtel and Vodafone to the Supreme court on the restructuring of dues to be paid over the period of 15-20 years is pending. A positive decision here would be a tremendous boost for its growth prospects. 

Our proprietary VGQM model has a  HOLD rating on the stock.