1 Aug 2023 , 11:41 AM
Result date: 3rd August, 2023
Recommendation: Buy
Target price: Rs. 919
Bharti Airtel (Bharti) witnessed healthy 4G subscriber additions in recent months and stands to benefit from the first full quarter of flow through of entry-level tariff hikes during the June 2023 quarter. The company added 0.08 million / 0.73 million reported/VLR subscribers, respectively. Reported subscriber adds for Bharti were the lowest in many months. Bharti raised its entry-level prices by ~56% pan-India, in a staggered manner between November 2022 and March 2023. While Q4 saw partial benefit from the same, Q1 will see the full flow-through of the tariff hike.
Analysts at IIFL Capital Services estimate Bharti to have added 7 million 4G subscribers in Q1 versus 7.4 million in Q4. One extra day in Q1 will aid sequential growth. In addition to entry-level tariff hike flow-through, these factors should drive 3.3% sequential mobile revenue growth in Q1, believe analysts at IIFL Capital Services. An increase in NW opex may limit EBITDA growth to 2.3%.
Nigeria, which contributes 40% to Airtel Africa’s revenue, saw ~42% currency depreciation versus the USD after the country let Naira float as opposed to a currency peg earlier. This was effective from June 15. In its filing, Airtel Africa stated that every 1% depreciation of Naira versus the USD would result in US$22 million/US$12 million annualized revenue/EBITDA hit. This suggests ~US$20 million EBITDA hit in Q1 (considering 15 days of sharply lower exchange rate).
On revenue weighted average basis, African currencies depreciated by ~6% sequentially versus USD, with currencies such as Congolese Franc and Kenyan Shilling depreciating in high-single digits. In USD terms, analysts at IIFL Capital Services estimate 1.1%/2.7% sequential revenue/EBITDA growth.
Bharti’s Profit After Tax (PAT) could dip 1.7% on a sequential basis.
Rs. Million |
June 2023 estimates |
YoY change |
QoQ change |
Revenue |
367,430 |
12.0% |
2.0% |
EBITDA |
188,331 |
13.9% |
0.7% |
EBITDA margin (%) |
51.3% |
87 bps |
(67) bps |
Profit After Tax |
29,548 |
83.9% |
(1.7)% |
Source: IIFL Research
Related Tags
Invest wise with Expert advice
IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000
IIFL Capital Services Support WhatsApp Number
+91 9892691696
IIFL Securities Limited - Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
ARN NO : 47791 (AMFI Registered Mutual Fund Distributor)
This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.