Earnings Outlook
Bharti Airtel may see India mobile sales momentum slow down in Oct-Dec
This story was originally published at 16:29 IST on 3 February 2025
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By Rajesh Gajra
NEW DELHI – Major telecom service provider Bharti Airtel Ltd. is seen reporting a mixed earnings performance for the December quarter with different verticals expected to deliver varied revenue and profit growth numbers. The consolidated revenue from Bharti Airtel's India mobile services, which contributes 65-70% of the total revenue, is seen rising sequentially, but in single-digits once again on account of revenue loss from continuing SIM consolidations. The base effect will also be high since the tariff hike-led spur in average revenue per user was seen in September as well, given that the hike was incorporated in July.
Revenue growth from the company's enterprise business segment is seen flattish, while that from its Africa business is likely to be muted. But a higher single-digit growth in the telecom company's home broadband services vertical will likely aid the consolidated top line growth.
According to the average of estimates from seven brokerage firms, Bharti Airtel's consolidated revenue for Oct-Dec is seen at INR 438.77 billion, up 5.8% sequentially. Among the revenue estimates, Sharekhan's INR 432.45 billion is the lowest and Nuvama Wealth Management's INR 446.60 billion is the highest.
The brokerages' average estimate for the company's consolidated net profit for Oct-Dec is INR 50.32 billion, up 40% on quarter. The net profit estimates range from a low of INR 39.44 billion by JM Financial Institutional Securities to a high of INR 57.44 billion by Kotak Securities' institutional equities division. The earnings before interest, tax, depreciation, and amortisation is seen at INR 237.62 billion, as per the average of estimates from six brokerages.
In the September quarter, Bharti Airtel reported a 14% on-quarter decline in consolidated net profit to INR 35.93 billion. But the consolidated net profit, adjusted for exceptional items in the September and June quarters, had risen 34% sequentially. The consolidated revenue from operations had increased 7.7% on quarter to INR 414.73 billion in Jul-Sept. This is higher than the Street-estimated increase in revenue of 5.8% for Oct-Dec. Given that the revenue growth in Jul-Sept was the highest in 14 quarters, the December quarter estimates indicate a momentum slowdown.
Brokerage firm Motilal Oswal Financial Services estimates the December quarter to include a boost from the consolidation of Indus Towers Ltd.'s financials from the middle of the quarter. Excluding the impact of this consolidation, the like-for-growth in Bharti Airtel's consolidated revenue will likely be 3%, according to the brokerage.
Motilal Oswal expects a 5-7% sequential increase in Bharti Airtel's revenue from its India mobile services segment in the December quarter. This mid-single digit growth estimate is significantly below the 10.3% sequential growth to INR 248.37 billion in the previous quarter.
Kotak Securities pegs the company's revenue growth at 5.4% on quarter, led by a 7.2% on-quarter revenue increase in the India mobile services segment. The brokerage, which issued its preview report for December quarter earnings of Bharti Airtel on Jan. 8, said it has modelled a net addition of 2.5 million customers in the wireless, or mobile services segment in its estimate.
But data released by the Telecom Regulatory Authority of India after Jan. 8 indicates that Bharti Airtel would have found it challenging to increase its domestic wireless customer numbers by 2.5 million from Sept. 30 to Dec. 31. Data released on Jan. 22 showed that Bharti Airtel net lost 1.50 million wireless customers in November as compared to October.
According to TRAI data, Bharti Airtel's wireless customers increased by 791,478 customers, or 0.2%, from Sept. 30 to Nov. 30. In the September quarter, SIM consolidations on account of tariff hike had resulted in India wireless customers declining 1.4% on quarter. Prior to the tariff hike in July, Bharti Airtel's net addition in India wireless customers was up 0.8% sequentially in the June quarter and 1.1% in the March quarter.
Kotak Securities expects flat on-quarter revenue growth for the enterprise segment of Bharti Airtel and around 3.7% sequential increase in Airtel Africa revenue. On Bharti Airtel's profitability front, the brokerage estimates a 11% sequential rise in earnings before interest, tax, depreciation, and amortisation of the company, accompanied by a 264 basis points increase in EBITDA margin to 55.3%.
The company will detail its December quarter earnings Thursday. Post-results announcement, investors will be keenly watching for the company's outlook on India mobile services' post-tariff hike average revenue per user trajectory, fibre-based home broadband reach, outlook for its Africa business, and guidance on capital expenditure in the next few quarters on the expansion in mobile and broadband services.
On Monday, shares of Bharti Airtel ended 1.8% up at INR 1,652.35 on the National Stock Exchange. The company's shares are down around 1% from Oct. 25, the trading day prior to the company's September quarter results announcement on Oct. 28.
Following are the Oct-Dec consolidated earnings estimates for Bharti Airtel based on reports from seven brokerage firms in descending order of estimate of net profit:
| Brokerage firm | Net Sales | Net Profit | EBITDA |
| (In INR million) | |||
| Kotak Institutional Equities | 4,36,942 | 57,444 | 2,41,738 |
| Centrum Broking Ltd. | 4,37,146 | 52,746 | 2,32,950 |
| Sharekhan Ltd. | 4,32,450 | 52,290 | ---- |
| Nuvama Wealth Management Ltd. | 4,46,599 | 52,243 | 2,46,961 |
| Motilal Oswal Financial Services Ltd. | 4,45,159 | 49,501 | 2,45,671 |
| Prabhudas Lilladher Pvt Ltd. | 4,37,649 | 48,583 | 2,30,641 |
| JM Financial Institutional Securities Pvt Ltd | 4,35,416 | 39,443 | 2,27,783 |
| Average | 4,38,766 | 50,321 | 2,37,624 |
End
Edited by Tanima Banerjee
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