Bharti Airtel Q3 preview: Revenue to grow 6%, ARPU seen at Rs 205

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Brokerages largely expect Bharti Airtel to report a steady December quarter aided by average revenue per user (ARPU) expansion and continued strong performance of the non-mobile segment.

The company will report its third quarter numbers later on February 5.

Net profit is likely to rise 47 percent year-on-year and 14 percent sequentially to Rs 3,308.50 crore, an average of seven analysts polled by Moneycontrol shows.

Consolidated revenue is expected to rise 6 percent year-on-year and 2.3 percent quarter-on-quarter to Rs 37,551.30 crore.

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Analysts have factored in net subscriber addition of 3.6 million and ARPU of Rs 205, up 1.1 percent QoQ given a better mix with more users converting to 4G from 2G.

Enterprise and home services will show steady growth, while DTH business will be muted, they added.

Bharti Airtel's India revenue is expected to rise 1.7 percent QoQ (10 percent YoY) to Rs 27,600 crore led by the mobile segment (up 2.1 percent QoQ/10.5 percent YoY) in Q3, brokerages said.

India EBITDA is likely to grow 1.7 percent QoQ (up 12.5 percent YoY) to Rs 14,800 crore, restricted by recognition of 5G-related costs.

How Airtel Africa fared?

Airtel Africa’s third quarter showed strong growth with revenue up 21 percent compared to 19 percent last quarter and EBITDA up 23.3 percent compared from 20 percent in constant currency.

Airtel Africa came out with its numbers on February 2.

Revenue and EBITDA, however, missed analysts' consensus by 1.4 percent, mainly attributed to forex movements in Nigeria and Malawi. Excluding one-off items, the EBITDA margin dropped 60 basis points to 48.4 percent.

One basis point is one-hundredth of a percentage point.

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Africa's Q3 capex of $182 million was below the $223 million consensus, potentially due to phasing, as the company maintained its FY24 guidance of $800-825 million. Operating Free Cash Flow exceeded consensus by 10 percent due to reduced capex.

Airtel Africa’s performance may be hindered by African currency devaluation but the underlying constant currency growth is likely to be healthy, analysts said.

Investors are closely monitoring Bharti Airtel's progress in 5G implementation in India, analysts said.

At 10 am, the stock was quoting at Rs 1,146.05, down 0.4 percent. from previous close. The stock is up 45 percent in the past one year.

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