Bharti Airtel Q3 net profit slips but ARPU improves on tariff hike

Bharti Airtel Ltd, India’s second-largest telecom operator, reported a drop in consolidated net profit for the three months ended December 2021 but tariff hikes cushioned the blow.

Airtel said on Tuesday net profit attributable to the owners fell 3% to Rs 830 crore from Rs 853 crore a year earlier.

Overall consolidated net profit, however, increased to Rs 1,650.7 crore for the December quarter from Rs 1,350.1 crore a year earlier.

The company’s consolidated revenue from operations grew 12.6% on year to Rs 29,866.6 crore. In December 2020 and September 2021, its revenue stood at Rs 26,567 and Rs 28,326.4 crore, respectively.

Other Key Highlights

1) India business posts quarterly revenue of Rs 20,913 crore, up 17.9% year on year.

2) India’s mobile services revenue rose 19.1% led by increase in average revenue per user.

3) Mobile ARPU increased to Rs 163 in Q3FY22 versus Rs 146 in Q3FY21.

4) B2B vertical saw 13.4% revenue growth led by demand for data portfolio and emerging businesses.

5) Consolidated EBITDA stood at Rs 14,905 crore, while EBITDA margin stood at 49.9%, up 398 basis points.

6) Sales and marketing expenses rose 37% to Rs 1,442.5 crore. 

7) Hughes and Airtel formed a joint venture in Q3 to become the largest satellite service operator in India.

8) 4G data customers rose 18.1% in Q3 to 195.5 million. In all, Airtel added 29.9 million 4G customers over last year.

Management commentary

Gopal Vittal, Airtel’s MD and CEO for India and South Asia, said the company delivered yet another quarter of sustained performance across all its business segments.

“The recent tariff revision for mobile services has gone down well and we are exiting the quarter with an industry leading ARPU of Rs 163. The full impact of the revised mobile tariffs, however, will be visible in the fourth quarter,” he said.

Vittal said the company’s Enterprise, Homes and Africa business continue to deliver strongly, with steady increase in contribution to the overall mix of the portfolio.

“Our balance sheet is robust and we are now generating healthy free cash flows. This has enabled us to recently prepay some of our spectrum liabilities to the Government thereby reducing the interest burden,” he said.

Vittal also said that Google’s recent investment was a strong validation of Airtel’s role in leading India’s digital revolution. “Our emerging digital services portfolio across Airtel IQ, AdTech, digital marketplace, Nxtra and digital banking positions us well to build an Airtel of the future,” Vittal added.

Also read : Borosil Renewables deliver strong Q3 results, PAT up by 18%