Bharti Airtel Q2 results: Profit may fall in double digits; 30-50 lakh subscriber additions likely

Bharti Airtel Ltd is likely to report a 10-30 per cent drop in net profit for the September quarter despite a 11-12 per cent rise in sales. Ebitda margin is seen expanding on both sequential and yearly basis. Analysts projected 30-50 lakh subscriber additions for the quarter and an improvement in average revenue per user (ARPU) due to the conversion of users from 2G to 4G and a higher number of days in the quarter gone by.

Emkay Global expects Bharti Airtel to report a profit of Rs 1,936.90 crore in Q2, down 9.7 per cent YoY over Rs 2,145.20 crore in the corresponding quarter last year. It sees net sales rising 11 per cent YoY to Rs 38,311.10 crore compared with Rs 34,526.80 crore in the same quarter last year. Ebitda margin i seen at 52.6 per cent against 52.3 per cent in June and 51 per cent in the year-ago quarter.

"The subscriber addition trend is likely to pick up vs. last quarter with the addition of 4 million subscribers. Data subscriber addition is likely to come in at 6.8 million. APRU is expected to increase by 2.2 per cent QoQ, aided by the conversion of users from 2G to 4G and a higher number of days in Q2. Consequently, India mobility segment’s revenue is likely to grow by 2.3 per cent QoQ," Emkay said.

Prabhudas Lilladher projected 28.5 per cent YoY plunge in adjusted profit at Rs 1,534.80 crore. It sees sales for Bharti Airtel rising 11.6 per cent YoY to Rs 38,517 crore. This brokerage is factoring in a net subscriber addition of 3 lakh and ARPU of Rs 203 for the quarter.

"Africa, enterprise and home services will show steady growth ahead, while DTH business will be muted," it said.

ICICI Securities expects Bharti’s ARPU to grow 1.5 per cent QoQ to Rs 203 aided by premiumisation, additional day and price hike in minimum recharge plan. This brokerage expects Bharti Airtel's subscriber addition to improve to 50 lakh post the impact of higher minimum recharge in the past few quarters. It sees Bharti’s data subscriber addition to be steady at 56 lakh.

In its Q2 preview, BNP Paribas said it expects 22 per cent YoY revenue growth for Bharti Airtel's home broadband business. Enterprise business revenue growth should also be in double digits, the brokerage said.

"We expect capex to remain elevated in 2QFY24 as Airtel continues to expand its rural 4G and urban 5G coverage, but we expect moderation in 2HFY24. Airtel’s Africa revenue is set to decline q-q due to the sharp depreciation of the Nigerian Naira towards the end of 1QFY24. However, its impact on our valuation for Airtel is negligible, as Airtel Africa (a listed company) accounts for only 5 per cent of our valuation," it said.