Bharti Airtel net profit soars 89%, meets estimates

Bharti Airtel reported its September quarter earnings on Monday after the market closed. The stock closed at Rs 832 per share on Monday afternoon. In 2022, Airtel stock rallied more than 16%. However, in the last five years, Airtel share has been able to deliver only 70% returns. Let us look at its recent quarter numbers in detail.

Bharti Airtel Q2 results: Highlights

Profit Soars: Telecom major, Bharti Airtel, reported a consolidated net profit of Rs 2145.2 crore for the September quarter, a rise of 89% YoY. In the year-ago period, the net profit was Rs 1,134 crore. The net profit is in line with Street estimates. The company was able to report higher profits on the back of strong growth in data traffic.

Revenue increase: The revenue reported by the company for Q2FY23 is Rs 34,526.8 crore against Rs 28,326.4 crore in the year-ago period. The growth was backed by strong and consistent performance delivery across the portfolio and crossing 500 million customers globally. 

Segment Revenue: Highest revenue growth was seen in Mobile services which were up 24.8% YoY led by continued 4G customer addition and an increase in ARPU. Also, the Homes business continues to accelerate growth momentum, up 38.9% YoY led by strong customer additions. The India business posted quarterly revenues of Rs 24,333 crore, a jump of 22.3% YoY. Airtel Business revenues are up by 16.8% YoY, backed by robust demand for data and connectivity-related solutions and emerging adjacencies.

EBITDA: Consolidated EBITDA stood at Rs 17,721 crore, while EBITDA margins were 51.3%, an improvement of 184 basis points over the year-ago period. EBITDA for India business was Rs 12,606 crore, while the margin for India business inched higher by 224 bps YoY to 51.8%. 

Consolidated EBIT stood at Rs 8,762 crore, while the EBIT margin reported was 25.4%, an improvement of 506 bps YoY. India business posted EBIT of Rs 5,236 crore and EBIT margin stood at 21.5%, expansion of 639 bps YoY. 

ARPU: The Average Revenue Per User increased to Rs 190 in Q2FY23 as against Rs 153 in Q2FY22, a jump of 23.7%. Sequentially, the ARPU was up 3.6%.

Debt rises: Consolidated net debt, excluding lease obligations for Airtel, stood at Rs 1.57 lakh crore as on September 30, 2022, compared to Rs 1.31 lakh crore as on September 30, 2021. The Net Debt-EBITDA ratio and including the impact of leases for the September quarter was at 2.96 times as compared to 2.52 times in the previous quarter.

Other updates: 4G data customers are up by 17.8 million YoY & million sequentially, 64% of the overall mobile customer base. Mobile data consumption was up by 19.6% YoY, while consumption per customer stood at 20.3 GB per month. The digital TV customer base was at a million in Q2FY23, holding steady vs Q1FY23. Airtel Payments Bank continues to grow rapidly through customer engagement – increasing monthly transacting users by 60% YoY.

Management Commentary: "We have delivered yet another quarter with competitive revenue growth and improved margins. Our consolidated revenue grew sequentially by 5.3% and EBITDA margin expanded to 51.3%. The consistency of our execution is driven by the strength and resilience of our portfolio. Our B2B and Homes business continued their strong growth momentum. At the same time, Mobile ARPU expanded to 190 on the back of premiumization and deep customer understanding", said Gopal Vittal, MD, and CEO, of India & South Asia.