Bharti Airtel Q3 preview: Consolidated net profit to likely jump more than 200% to Rs 2,521 crore

Bharti Airtel

India’s second-largest telecom company Bharti Airtel is likely to report strong earnings for the December quarter on February 7.

Most analysts expect the company to report a 150 to 250 percent year-on-year (YoY) growth in net profit for the quarter. It will grow at an average of 204 percent to Rs 2,521 crore, according to the average estimates of brokerages polled by Moneycontrol. Sequentially, it is expected to grow around 18 percent.

The company’s revenue growth is projected at 18 percent YoY, hitting Rs 35,367 crore, while growing 2 percent on-quarter.

Analysts at Motilal Oswal Securities peg sequential growth in revenue at 3 percent led by a 2.5 percent increase in ARPU (average revenue per user) and subscriber addition of 1 percent.

ARPU for the quarter is expected to grow 20 percent year-on-year to Rs 195. It will grow 3 percent sequentially compared to Rs 190 reported for the September 2022 quarter, the brokerage said.

"For Q3, we have factored subscribers to grow 15 lakh to 32.78 crore, coupled with ARPU increase of 3.5 percent QoQ to Rs 196,” analysts at Prabhudhar Lilladher said. They also factored in a 4.5 percent quarterly revenue growth for the enterprise segment along with an EBITDA (earnings before interest, taxes, depreciation, and amortisation) margin improvement of 30 basis points (bps).

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

As per the poll, the company's EBITDA is likely to grow 23 percent yearly and 3 percent sequentially to Rs 18,293 crore with the EBITDA margin seeing an expansion of around 160 bps on a yearly basis at 51.5 percent.

Analysts at ICICI Direct wrote, “We expect India EBITDA margins at 52.5%, up 70 bps QoQ, aided by residual benefit of lower SUC, despite higher network opex (operating expense) on 5G rollout.” They also expect modest subscriber additions of 1 million with SIM consolidation restricting subscriber addition.

SUC (spectrum usage charges) is a percentage of adjusted gross revenue that operators pay the department of telecommunications.