Telecom services provider Bharti Airtel on November 2 reported a strong growth in Profit After Tax (PAT) which came in at Rs 1,134 crore as compared to a loss of Rs 763 crore in the corresponding quarter last year. On a quarterly basis, PAT has jumped 300 percent from Rs 284 crore reported in the previous quarter.
The company reported a 13 percent y-o-y growth in consolidated revenue from Rs 25,060 crore in the previous year to Rs 28,326 crore for the reported quarter. Sequentially, the revenues have improved by 5 percent from Rs 26,854 in the preceding quarter.
Commenting on the business performance, Gopal Vittal, MD and CEO, India & South Asia, said, “During the quarter gone by, we sustained our operational excellence with a healthy 5.5% sequential growth in consolidated revenues 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 welcomed the telecom reforms and said, “We welcome the reforms announced by the Government for the telecom industry and believe this will add to the ability of the industry to invest so as to drive India’s digital story. We hope the reforms momentum will continue and all longstanding issues impacting the industry will be addressed.”
The company witnessed strong performance across the businesses.
Revenue generation
Revenues from India operations were by 18.3 on a yearly basis to Rs 19,890 crore. Revenue from India mobile services grew 20.3% y-o-y on account of increase in 4G customer base and increase in ARPU which came in at Rs 153 compared to Rs 143 in the same period last year. 4G customers for the company improved by 26 percent y-o-y to 192.5 million and the company added 40 million 4G users to its fold in the receding four quarters.
The company recorded average data usage per data customer at 18.6 GBs/month and voice usage per customer at 1,053 mins /month.
The company witnessed strong demand for its integrated suites of services across connectivity, collaboration, Data Center, cloud and security solutions. Revenues were up 11.5 percent y-o-y for this business. “Airtel announced investment of Rs 5,000 crore to further cement ‘Nxtra by Airtel’ as India’s largest network of hyperscale and edge data centres by tripling the data centre capacity to over 400MW by 2025 to meet the surging demand,” the company said.
During the quarter, Airtel Payments Bank turned profitable with a strong total customer base of over 115 million and highly engaged Monthly Transacting Users (MTU) base of over 31 million, the company added. Vittal added, “It is exciting to see the way our new businesses – Airtel Payments Bank, Data Centres and revenues from digital services are shaping up.”
Homes business posted strong double-digit growth of 21.3 percent on an annualised basis while digital TV business grew by 5.7 percent y-o-y. The company added 467K net new customers in this quarter, which is the highest ever quarterly addition for the company. The total customer base now stands at 3.8 million and the company has its operations across 523 cities of India.
The Africa business in constant currency (CC) generated 22.7% more revenues on a yearly basis on a customer base of 122.7 million. Capex spend in this quarter for the business was Rs 1,032 crore.
Margins
Consolidated EBITDA for the quarter stood at Rs 14,018 crore which is an increase of 24.5 percent on a y-o-y basis. EBITDA margins expanded by 456 bps to 49.5 percent in this quarter.
EBIT was up 45.4 percent on a y-o-y basis to Rs 5,756 crore and EBIT margins recorded a yearly improvement of 453 bps to 20.3 percent.
On the financial health of the company, Vittal commented, “We continue to maintain high degree of financial flexibility. As a result, we have now achieved Nil bank debt for our India businesses.” We will continue to evaluate all options to maintain comfortable leverage profile and manage associated costs,” he added.
Capex
Consolidated capex spend in the quarter was Rs 6,972 crore out of which capex in India stood at Rs 5,799 crore while Africa contributed Rs 1,032 crore.
Customer base
The company has an overall customer base of 480 million across 16 countries with India having 355 million customers and Africa stands at 122.7 million.
The streets expectation was a consolidated net profit of Rs. 1,141 crore and revenues of Rs. 27,811 crore for the current quarter.
The company had received a one-time payment of Rs 722 core from Reliance Jio for transfer of spectrum which added to the performance of the company.
The stock closed at Rs 713.95 today, up Rs 1.45 from its previous close. The stock is up 59 percent in the last 1 year and 42.7 percent in this financial year. During the last 3 months it has moved up by 28.7 percent and by 5.6 percent in the past one month.
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