Bharti Airtel reports great Q2 result; All eyes now on tariff hike

The company surpassed analysts’ estimates on key parameters, aided by one-time spectrum sales gains and tariff hikes made in August. As a result, on a consolidated basis, net profit grew 300% sequentially ₹1,134 crore in Q2 FY22. Investors should note that the adjusted net profit for this lump-sum gain was at ₹594 crores.

Consolidated revenue was up 6% on a sequential basis ₹28,326 crores. consolidated Ebitda of ₹14,018 crore was 6.2% higher as compared to April-June. Ebitda is short for earnings before interest, taxes, depreciation and amortization.

Analysts at Motilal Oswal Financial Services Ltd said consolidated Ebitda growth was driven by consistent growth in India Mobile Ebitda, and market share wins and better growth than Reliance Jio. “Ebitda is up 25% from last year, indicating that the healthy Subs/ARPU equation is showing gains – all this without any fee hikes,” said Motilal’s report.

Ebitda margin was flat at 49.5% as against 49% in the previous quarter.

As far as India business is concerned, revenue grew by 5.64% and mobile revenue grew by 6.19% quarter-on-quarter. Its average revenue per user (ARPU) was in line with estimates ₹compared to 153 ₹146 in the previous quarter.

“Mobile revenue growth of 6.2% has been topped by Jio’s 3.6%, and Bharti’s annual growth has been nearly 600 basis points higher in the last 5 quarters,” analysts at IIFL Securities Ltd said in a report. One basis point is one hundredth of a percentage point.

Moreover, analysts also say that its subscriber additions at 2.2 million were lower than the 12-13 million additions seen in the last fiscal. This was due to tariff hikes, which increased market churn and SIM card consolidation, which is driving ARPU higher than subscribers, analysts said.

Its 4G subscriber base stood at 8.1 million. Although subscriber growth is recovering from 5 million in Q1 FY22, it is still lower than the 12-13 million seen last year. Data traffic grew 5% sequentially in Q2 FY22.

“Bharti’s data traffic and data subscribers is almost half that of RJio, the capacity gap is very small, highlighting the better network experience,” said Motilal Oswal’s report.

Meanwhile, a major trigger for the stock is the now much-awaited tariff hike. Analysts at foreign brokerage house CLSA said in a report, “Attractive cashback offers on around 150 smartphones from Bharti and higher upfront and monthly cost of Jio for JioPhone Next will keep the momentum of Bharti 4G customers strong, with tariff hike in prepaid data.” awaits.”