Bharti Airtel Q2: Revenue may jump double-digits on increasing ARPU, subscriber addition

Airtel Africa’s revenue might decline due to the sharp depreciation of the Nigerian Naira.

Telecom giant Bharti Airtel is likely to post “industry-leading revenue growth” in the upcoming Q2FY24 earnings report, led by higher wireless revenues and subscriber addition. The telecommunications player will announce its second quarter earnings on October 31.

According to a poll of brokerages, conducted by Moneycontrol, Bharti Airtel is expected to see revenues of Rs 38,259 crore for the quarter ended September, higher by 10.8 percent from Rs 34,526 crore in the year-ago period. The EBITDA is expected to come in at Rs 19,956.6 crore, growing 13.4 percent year-on-year from Rs 1,75,93.8 crore in Q2FY23.

BNP Paribas said that India’s mobile revenue growth will be a healthy three percent, with the home broadband business seeing a 22 percent YoY revenue growth. Prabhudas Lilladher added that Bharti Airtel is also targeting ~Rs 5,000 crore market opportunity with its enterprise offerings, including CPaaS, cloud, cybersecurity and data centres as the company expects 80 percent of corporates to put up 5G within the next three years.

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Brokerages believe that Bharti Airtel is poised to see a growth in its Average Revenue Per User (ARPU), which will clock in at an increase between 1.6 percent to 2.2 percent quarter-on-quarter.

The ARPU will come in at around Rs 204, higher from Rs 200 in the previous quarter of the current fiscal. The growth will be driven by having one more day during the quarter, a mix of improved services, and strong mobile broadband upgrades.

The overall subscriber growth is pegged at around four million, while data subscriber-addition trend should grow on a sequential basis to 6.8-7 million, according to estimates. Analysts added that the surge in data subscribers is a reflection of increased data consumption across the globe and the ongoing transition to 4G and 5G networks.

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Analysts projected Airtel Africa’s revenue to decline due to the sharp depreciation of the Nigerian Naira towards the end of Q1FY24. “Airtel Africa highlighted that the impact of devaluation on revenue and EBITDA was minimal during Q1FY24 due to lower weighted average NGN/USD rate used in reporting its consolidated results. Further, it expected a majority of its impact to materialise in Q2FY24”, said JM Financial, a domestic brokerage.

However, while the African operations contribute to Airtel's global presence, their bearing on the overall valuation is relatively limited, said BNP Paribas.