Bharti Airtel Q4 profit beats Street estimates; ARPU, margins expand

Telecom major Bharti Airtel Ltd on Tuesday reported a consolidated fourth quarter net profit of Rs 2,007.8 crore, a 164% rise from Rs 759.2 crore a year earlier. 

Airtel’s profit beat most analysts’ expectations by a significant mile. Most analysts had expected that the company would clock a quarterly net profit of less than Rs 1,600 crore for the three months ended March 2022. 

Airtel, which has had to face stiff competition from and has lost market share to Reliance Industries Ltd’s Jio, said its consolidated earnings before income tax, depreciation and amortisation for the fourth quarter was at Rs 15,998 crore, with an EBITDA margin of 50.8%. This is an improvement of 192 basis points over the same quarter last year. 

Consolidated revenue for the second-largest telecom company by subscriber base in India rose 22% on-year to Rs 31,500 crore from Rs 25,747 crore registered in the year-ago quarter.

Other key highlights

1) On a sequential basis, profit inched up 142% from Rs 830 crore earned during the October–December period.

2) On a sequential basis, revenue rose 5.5% from Rs 29,867 crore recorded in the previous quarter.

3) Mobile ARPU (average revenue per user) increased to Rs 178 in Q4FY22 compared with Rs 145 in Q4FY21 and Rs 163 in Q3FY21.

4) Airtel said mobile data consumption was up by 28.7% year-on-year, with consumption per customer at 18.8 GB per month.

5) The company said it paid Rs 8,815 crore towards part-prepayment of deferred liabilities pertaining to the 2015 spectrum.

6) India business generated revenue of Rs 22,500 crore during the quarter, registering a YoY growth of 22.27%, while revenue for its Africa business in constant currency was up 19.1% YoY.

Management commentary

Gopal Vittal, MD and CEO, India and South Asia, said this has been another quarter to cap a full year of consistent and competitive performance across our portfolio underscoring our focus on all round delivery.

“Our strong balance sheet and cash flows have enabled us to further repay some of our spectrum liabilities ahead of schedule and improve our leverage,” he said.

“Airtel continues to have the highest ARPU at Rs 178. Our homes and enterprise businesses continue to exhibit very strong growth momentum, reflecting the resilience of our overall portfolio. Our strong balance sheet and cash flows have enabled us to further repay some of our spectrum liabilities ahead of schedule and improve our leverage,” he added. 

Vittal further said that Airtel remains optimistic about the opportunities in the coming years and believes it is well poised as a company for three reasons. First, its ability to execute consistently to a simple strategy of winning with quality customers and delivering the best experience to them. Second, its future-proofed business model with massive investments in both infrastructure and digital capabilities. And third, its financial prudence backed by our strong governance focus, he said.