Bharti Airtel Quarterly Results Q2 FY22

India’s leading telecom service provider, Bharti Airtel, reported its second-quarter earnings. Its profit jumped to a whopping 300% on a sequential basis. It increased from Rs 283 crore in the June quarter to Rs 1,134 crore in the September quarter. 

The ‘work from home’ culture and remote working has led to high data usage- a phenomenon that has benefited Airtel. The company also took a timely tariff hike. It added to its coffers from the upswing in the subscriber base the company was already witnessing in the quarter. The company, however, had reported a loss of Rs 763 crore in the same period last year. 

Airtel’s revenue is up 13% YoY to Rs 28,326 crore compared to Rs 25,060 crore in the year-ago period. On a sequential basis, its revenue rose 5.4%. The telecom giant reworked its basic prepaid tariff plan from Rs 49 to Rs 79 in the quarter under review. This has aided its revenue growth. Its EBITDA expanded 24.5% to Rs 14,018 crore in the current quarter from Rs 11,259 crore in Q2 FY21. 

Airtel’s user base

Mobile ARPU (Average Revenue Per User) for Airtel increased to Rs 153 in this quarter vs Rs 143 in the year-ago period. 

Airtel added 39.9 million 4G customers over the last year of which 8.1 million 4G customers were added in the last three months. This takes its total base to 192.5 million 4G users. 

Meanwhile, the mobile data consumption by Airtel users was up by 47.5% YoY with an average customer using 18.6 GB data per month. 

Hits

• PAT up 300% QoQ from Rs 283 crore in the June quarter to Rs 1,134 crore.
• The company reported EBITDA margin at 49.5% with an improvement of 456 bps YoY.
• Total Capex spend for the quarter at Rs 6,972 crore.
• Revenue from Africa business up 22.7% YoY at Rs 8,591 crore.
•  Mobile revenue up by 20.3% YoY.
•  ‘Airtel Home’ arm of the company records the highest ever addition of subscribers in a quarter with the addition of 4,67,000 consumers between June and September 2021- making it a 21.3% YoY growth.
•  Digital TV witnessed a revenue growth of 5.7% YoY with a total of 18 million customers.

Management commentary 

Gopal Vittal, MD and CEO, India & South Asia, expects the reforms announced by the Government to help the telecom sector in bringing in new investments. And address certain issues that had been plaguing the industry. 

He further added that the company would strive to maintain a comfortable leverage profile. The company’s continued focus on new businesses including Airtel Payment Bank, and Data Centres should help the future growth of the company. 

Other things to know

• Airtel Payments Bank turns profitable with 31 million Monthly Transacting Users (MTU).
• The company will invest Rs 5,000 crore in its ‘Nxtra by Airtel’ business to cement it as India’s largest network of hyperscale and edge data centres. Airtel plans to triple the data centre capacity to over 400MW by 2025 to meet the surging demand
• Airtel’s P/E ratio currently stands at a massive 348.75 as against the industry average of 20.55 while its RoE is at -38.41%.

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Research Analyst: Bavadharini KS