Sharekhan's research report on Bharti Airtel
For Q4FY23 Consolidated revenues increased by 0.6% q-o-q (up 14.3% y-o-y) to Rs. 36,009 crores, in-line with our estimate of Rs. 36,407 crores. EBITDA margin for the quarter improved by ~40 bps q-o-q to 51.9%, ahead of our estimate of 51.4%, led by lower access charges and other expenses while Employee expenses and License fees & Spectrum charges remained stable. ARPU of India wireless business was flat q-o-q at Rs. 193 but missed our ARPU estimates of 197. Data customer base increased 3.3%/11.6% q-o-q/y-o-y respectively. Addition of 4G customers accelerated during the quarter by 7.4 million, up 3.4%q-o-q (11.6% y-o-y). Home broadband business’ revenue growth continued to remain strong at 6% q-o-q, led by 7.2% q-o-q growth in volume, while its ARPU declined by 1.5% q-o-q. Airtel business revenue was flat for the quarter while DTH business declined by 1.4% q-o-q during the quarter. We continue to prefer Bharti Airtel, given the growing 4G subscriber additions, accelerated 5G rollout, continued traction in Enterprise and Home Business and industry leading ARPUs.
Hence, we maintain Buy recommendation on Bharti with an unchanged price target (PT) of Rs. 1,010. At the CMP the stock trades at 33.2/23.9x its FY24E/ FY25E EPS respectively.
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