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Informist, Wednesday, Jul 24, 2024

By Anjana Therese Antony

MUMBAI – Telecom player Bharti Airtel Ltd is likely to post sequential and on-year growth in its key earnings metrics, backed by subscriber addition, growth in India operations, and recovery in its Africa business, brokerage firms said. The company's operating profit is also expected to see a sequential rise, supported by a healthy performance in its India business and ease of pressure from currency devaluation in Africa.

The New Delhi-based company's consolidated net profit for Apr-Jun is likely to grow nearly 68% sequentially to 34.79 bln rupees, according to the average of estimates of six broking firms. While Kotak Institutional Equities has the highest bottom line estimate of 39.38 bln rupees, Axis Securities has the lowest of 20.68 bln rupees.

Its consolidated revenue for the June quarter is seen rising 2.6% on quarter to 385.76 bln rupees, as per estimates. Axis Securities has the highest topline estimate of 389.96 bln rupees and Prabhudas Lilladher has the lowest of 381.64 bln rupees. 

Compared to the year-ago period, the bottomline is seen growing nearly 116% and the topline is likely to grow 3%.

The company's earnings before interest, taxes, depreciation, and amortisation are expected to be 200.48 bln rupees for the June quarter, a sequential growth of 2.3% and a 1.5% rise on year. When it comes to the company's consolidated operating margin, the metric is expected to expand 100 basis points sequentially to 52.5%, as per Motilal Oswal Financial Services. During the March quarter, the telecom player's operating margin had declined to 52.1% from 52.9% in Oct-Dec.

Bharti Airtel, an industry major in terms of average revenue per user, is expected to post 1.5% on-quarter growth in its India mobile services business, "led by flattish ARPU growth and 4.0 mln subscriber addition," Nuvama Institutional Equities said in its earnings preview report. In the previous quarter, the company had added 7.8 mln smart phone customers and reported an ARPU of 209 rupees from 208 rupees in the December quarter. This is higher than its industry peer Reliance Jio Infocomm's ARPU of 181.7 rupees. 

AFRICA BUSINESS

For the Africa business, Nomura Global Markets Research estimates the revenue to grow 4% sequentially to 96.8 bln rupees, underpinned by sustained strong operational performance and easing of currency devaluation issues during the quarter. The broking firm said Nigerian Naira depreciated by 7% against the US dollar in Apr-Jun compared to 60% in the March quarter. From June 2023 to the end of March, the Naira has devalued to 1,303 per US dollar from 465 per US dollar.

In the previous quarter, the company's Africa business took a hit due to weakness in Nigerian Naira and reported a nearly 17% on-year decline in its revenue from this region to $1.12 bln. It also posted a net loss of $91 mln for the March quarter. The company had said that its Africa business constitutes about 25% of its revenue. 

The company will announce its June quarter earnings on Aug 5. In the post-earnings call, investors will look out for management comments on progression in 5G adoption, subscriber addition, traction in home broadband, and business outlook. 

At 1318 IST, shares of Bharti Airtel were trading 1.1% lower at 1,449.45 rupees on the National Stock Exchange. It has fallen over 1% in the past seven days, but gained 63% in 52 weeks.

Following are the Apr-Jun earnings estimates for Bharti Airtel, based on reports compiled by Informist from six brokerage houses:

End

US$1 = 83.70 rupees

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Deepshikha Bhardwaj

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