Last updated: 04 Aug, 2021 | 07:02 pm
Net profits misses estimates - Bharti Airtel’s profit plunged 62.7% sequentially to Rs 283 crore for the quarter ended June compared to Rs 759 crore in the last quarter. The number was much below analysts' expectation of Rs 604 crore. The decline was on account of higher tax expenses for the Apr-Jun quarter.In the year-ago June quarter, Airtel had posted a massive loss of Rs 15,933 crore, owing to one-time provisioning for AGR dues.
Revenue rises - The revenue increased 4.3% sequentially to Rs 26,853.6 crore against Rs 25,747 crore in previous quarter. The analyst had estimated revenue of Rs 26,247 crore. On a yearly basis the company's revenue jumped by 15.3% because of the low base. The company claimed that its revenue grew 21.2% on a comparable basis considering mobile termination charges were scrapped on January 1, 2021.
Margins improve - Airtel has reported the consolidated EBITDA for the Apr-Jun quarter to Rs 13,189 crore, while the margins expanded to 49.1% from 48.9% last quarter.
ARPU - Average Revenue Per User (ARPU) is the amount an operator earns per subscriber every month.This increased from Rs 145 to Rs 146 sequentially. The main reason for flat ARPU was because of free recharges offered by the company to low-income subscribers.The other reasons being moderation in overall wireless subscribers, lower number of recharges during the lockdown, and fewer upgrades by 2G subscribers to 4G network amid lack of smartphone shipments. The company has recently increased prices of its postpaid plans by 20 to 50% along with entry-level prepaid schemes by over 60% to boost ARPU.
Expense and access charges - The overall expenses rose to Rs 13,873.3 crore, a sequential increase of 3.4% and the finance costs increased to Rs 4,225.7 crore, an increase of 9.5% sequentially. The spend on spectrum charges or license fees rose 5.8% sequentially to Rs 2,645.5 crore. The access charges also grew by 3.3% sequentially to Rs 1,616.7 crore.
User base - Bharti Airtel reported an increase of 4G subscriber base by 2.8% sequentially to Rs 18.44 crore with user accretion over the last four quarters standing at 4.6 crore. In the quarter ended June, the Homes business grew by just about 13 percent over last year and added 2.85 lakh customers in the quarter, the highest ever.
Bharti Airtel Q1 Results Review:
Bharti Airtel has reported a positive topline but lower bottomline performance due to higher tax expenses for the Apr-Jun 21 quarter. The telecom sector has benefited from 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.The company is improving its services by deploying an additional spectrum across 900, 1,800, 2,100 and 2,300 bands in multiple circles during the quarter to improve network availability and data speeds, delivering the best network experience to its customers. Its expansion to non-wired cities through the LCO model is accelerating fast and is now available in more than 300 cities with overall operations in 387 cities. Bharti Airtel remains comfortably placed, and will continue to gain market share from struggling competitor Vodafone Idea and also tackle the competition from Reliance Jio.
The brokerage firms remain optimistic on the stock because of the positive growth in revenue and EBITDA and 57% 4G penetration in its own Indian subscribers. Firms also forecast a solid 20% revenue growth in the Wireless segment for next 2 years. Many firms including Morgan Stanley and CLSA maintain a ‘buy’ call . The consensus price ranged between Rs 650 to Rs 750.Ahead of the results, Airtel's scrip was up 2.66 per cent to settle at Rs 580.2 on NSE.