Bharti Airtel smashes street estimates as profit soars, revenue grows in double digits

Telecom major Bharti Airtel Ltd on Tuesday posted strong results beating analyst expectations with respect to both revenue and net profit for the second quarter ended September 30, 2021.

Bharti Airtel posted a consolidated net profit of Rs 1,134 crore as against a net loss of Rs 763.2 crore in the second quarter last year. On a sequential basis, net profit quadrupled.

Analysts at brokerage houses had expected net profit to come around Rs 680-780 crore.

Bharti Airtel’s consolidated revenue shot up 13% to Rs 28,326.4 crore from Rs 25,060.4 crore in the same quarter last year. On a sequential basis, revenue was up 5.4% from Rs 26,853.6 crore in the first quarter. On a comparable basis revenue grew 18.8% year on year.

The street estimate was that the company will post 7-8% rise in revenue on a year-on-year basis.

The company, which competes with Reliance Jio and Vodafone Idea in the Indian market, saw its shares price end at Rs 712.9 apiece, up 0.08% on Tuesday. The company declared results after trading stopped for the day.

Bharti Airtel Q2: Other highlights

1) EBITDA rose 24.5% to Rs 14,018 crore from Rs 11,259 crore in Q2 FY21; Analysts expected EBITDA growth at 12-17%.

2) On a sequential basis, EBITDA rose around 6% from the first quarter.

3) Sales and marketing cost shot up nearly 50% to Rs 1,267 crore.

4) Spectrum charges and licence fees rose about 20%.

5) Airtel benefited from a sharp slide in access charges to Rs 1,670.8 crore from Rs 2,923 crore in Q2 FY21.

6) Revenue from mobile services in South Asia declined year on year while that from India and Africa rose 10% and 20%, respectively.

7) Profit from DTH business remained under pressure but profit from India mobile business as well as from Africa mobile services unit jumped.

8) India revenue for Q2 at Rs 19,890 crore increased by 18.3% YoY on a comparable basis and 10.4% YoY on a reported basis.

9) India mobile revenue grew 20.3% on comparable basis as ARPU rose to Rs 153 from Rs 143 last year.

10) 4G data customers increased by 26.1% YoY to 192.5 million with average data usage per data customer at 18.6 GBs/month.

Bharti Airtel management commentary

Gopal Vittal, MD and CEO for India and South Asia at Bharti Airtel, said the company continues to maintain high degree of financial flexibility and has achieved zero bank debt for its India businesses. “We will continue to evaluate all options to maintain comfortable leverage profile and manage associated costs,” he said.

Vittal also said that, during the quarter gone by, Airtel recorded a healthy 5.5% sequential growth in consolidated revenue and expansion of EBITDA margin to 49.5%.

“Our strategy of focusing on quality customers has been validated by the strong price flow and ARPU increase that we have seen in our wireless business,” he said. “The step up in performance of our enterprise and homes business reflects the resilience and strength of our overall portfolio.”

Vittal added that new businesses including Airtel Payments Bank, data centres and revenue from digital services are shaping up well. “With a future-proofed 5G network, we are well positioned to build a strong Airtel of the future.”