Analysts expect Bharti Airtel’s Q1 profit to halve QoQ; stable ARPU likely



Analysts are pencilling-in a muted quarter for telecom companies marked by flattish average revenue per user (ARPU) growth and lean subscriber addition. Among the listed companies, Bharti Airtel, which is slated to report its June 2021 quarter (Q1FY21) results on Tuesday, August 3, may report stable ARPU sequentially and nearly flat revenue growth, analysts say.


“The second wave led lockdown is likely to lower the subscriber addition momentum from 13-14 million quarterly run rate to around 2 million in Q1FY22. Furthermore, the quarter is also expected to witness the impact of extension of validity for bottom of the pyramid customers, restricting ARPU,” noted analysts at ICICI Securities in a pre-result report.

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The company had posted a consolidated net profit of Rs 759.2 crore in the March quarter of FY21 (Q4FY21), while it had incurred a loss of Rs 15,933 crore in the year-ago period. Revenue, meanwhile, was Rs 25,747 crore in Q4FY21 and Rs 23,938.7 crore in Q1FY21.


Here’s what leading brokerages expect:


Emkay Global


The brokerage projects a 58 per cent QoQ decline in Airtel’s consolidated net profit at Rs 318.5 crore for Q1FY22 on the back of flat (1.5 per cent QoQ rise) revenue of Rs 26,128.3 crore. Ebitda (earnings before interest, tax, depreciation, and amortisation), too, is expected to grow 1.5 per cent QoQ and 20.3 per cent YoY at Rs 12,521.2 crore. It was Rs 12,331.9 crore in Q4FY21 and Rs 10,407.9 crore in Q1FY21.





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The African business should see a rebound in revenues and profitability, with the resumption of enrolment of new subscribers in Nigeria from April 2021 while it would get impacted by currency devaluation, the brokerage said.


“After being impacted in Q4 by the transition to the zero-IUC regime and lower number of days, Bharti’s ARPU is likely to be stable (at Rs 145) sequentially as mix improvement and higher number of days will get offset by the impact of free recharges offered to low income subscribers. Data subscriber additions should stand at 1.6 million – significantly lower than the quarterly average of 10 million in the last four quarters,” it added.


ICICI Securities


The brokerage expects Bharti Airtel’s Indian wireless revenue to be flattish QoQ at Rs 14,085 crore while India non-wireless revenues could remain robust especially broadband and enterprise. Globally, Africa business is likely to witness revenue growth of 2 per cent QoQ to Rs 7,753 crore.


Considering the above, ICICI Securities pegs the telco’s consolidated revenue at Rs 26,121 crore. “We expect India Ebitda margins at 49 per cent, flattish QoQ. Africa margins are expected to be stable QoQ at 47.5 per cent,” it said.


With reported consolidated Ebitda at Rs 12,620 crore is expected (up 2.3 per cent QoQ) and margins at 48.3 per cent (up 40 bps QoQ), it expects PAT of Rs 392 crore.


Kotak Securities


Analysts here expect India wireless revenues to moderate to Rs 13,900 crore and Ebitda to decline 4 per cent sequentially (up 23 per cent YoY) at Rs 12,180 crore underpinned by net decline in EoP subscriber base by 5 million to 318.9 million, and 3 per cent moderation in ARPUs to Rs145/month reflecting the impact of lockdowns.


“Among the other business segments, we assume 4 per cent QoQ decline for the Africa business, 1-2 per cent sequential growth in revenues for enterprise and home broadband segments, and 2 per cent decline for the DTH business,” they noted.


Overall, revenue is pegged at Rs 25,307.1 crore; PBT at Rs 669.4 crore; and PAT at Rs 320 crore.


JM Financial


The brokerage has the most bullish estimates for with revenue seen at Rs 26,702.5 crore (up 9.4 per cent YoY and 3.4 per cent QoQ), and net profit seen at Rs 1,016.6 crore, up 34 per cent QoQ.


“Given April and May ’21 may have witnessed net subscriber losses of 2 million due to SIM consolidations, offset by 4 million mobile broadband (MBB)/4G additions in June 21, we build-in around 2 million net subscriber additions in 1QFY22,” the brokerage said.


It added: ARPU is expected to be muted at Rs 146 due to the impact of lower usage and free recharges, partially offset by the lag effect of strong MBB/4G additions witnessed in the last quarter. We expect strong revenue growth in Africa (3.7 per cent QoQ) and Enterprise businesses (2.5 per cent QoQ), while fibre to the home (FTTH) and direct to home (DTH) are likely to be muted due to mobility restrictions.





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