Shares of Bharti Airtel were in focus this morning, a day after the company declared its December quarter earnings.
India’s second-largest telecom company recorded a 91 percent surge in consolidated net profit at Rs 1,588 crore for the quarter ended December 2022 from Rs 830 crore a year back, helped by improved realisation along with strong 4G customer additions during the year.
However, sequentially, the telecom major saw a drop of 26 percent in net profit. The reported profit also missed analysts' projections who were expecting around 155 percent on-year growth for the third quarter.
Total revenue stood at Rs 35,804 crore, up 20 percent from Rs 29,867 crore reported in the corresponding quarter last year. Revenue was up 4 percent sequentially, Bharti Airtel said in an exchange filing.
Consolidated EBITDA was at Rs 18,601 crore during the quarter, up 25 percent on-year and 5 percent on-quarter. EBITDA margin for the quarter was at 52.0 percent as against 49.9 percent in the corresponding quarter last year and 51.3 percent in the previous quarter.
Its India average revenue per user (ARPU) per month was at Rs 193 during the quarter, the company said, rising 2 percent sequentially and 18 percent annually.
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At 9:28am, Bharti Airtel was quoting at Rs 769.80, down Rs 15.55, or 1.98 percent on BSE. It has touched an intraday high of Rs 786.50 and an intraday low of Rs 767.
Here's what global brokerages say about the stock after its Q3 results:
Morgan Stanley
The brokerage firm has an 'overweight' rating with target of Rs 860 per share. It feels that the third-quarter EBITDA was in-line, but capex was higher than expectations. Strong 4G net had helped lower subscriber the churn sequentially. It posted good margin in India business barring digital TV segment. It was a reasonably strong operating cash flow, higher than expected capex and in-line net debt, the research firm said.
CLSA
The research firm has a 'buy' rating with target at Rs 1,015 per share. "With Q3 consolidated revenue and EBITDA rise, we raise FY24-25 forecasts by 3-9 percent. We see the company recording 23 percent India mobile EBITDA CAGR by FY25.
JP Morgan
The brokerage firm has an 'underweight' rating, with target at Rs 700 per share.
"The results were in-line while wireless EBITDA was a disappointment and capex shooting up. Higher 5G capex, lack of tariff hikes and deflation in premium ARPU will drive down return on invested capital (RoICs). We remain circumspect on ARPU support from 4G prepaid hikes," it said.
UBS
The global research firm has a 'buy' rating with target at Rs 995 per share.
It is of the view that Q3 was largely in-line at operating level. Subscriber addition momentum improved significantly, the highest in past seven quarters.
"While ARPU growth was moderate, strong net adds led to mobile revenue growth. Bharti Airtel also added 6.4 million 4G subscribers. Mobile EBITDA margin rose aided by Spectrum Usage Charges (SUC) reduction," it added.
Goldman Sachs
The global brokerage firm has a 'buy' rating with target at Rs 875 per share.
It feels that Bharti Airtel's Q3 was in-line with robust growth outlook. "Wireless segment reported another quarter of revenue growth. Non-wireless businesses growth was healthy on a YoY basis. We forecast wireless revenue to grow at 15 percent FY23-25 CAGR aiding free cash flow (FCF) generation and forecast $2.5 billion in FCF for India business in FY24," it said.
With agency inputs
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