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Q4FY23 Preview: Bharti Airtel: Revenue seen at Rs. 360,674 million, PAT at Rs. 28,023 million

15 May 2023 , 10:19 AM

Result date: 16^th May, 2023

Recommendation: Buy

Target price: Rs. 892

Analysts at IIFL Capital Services believe Bharti Airtel’s (Bharti) entry-level tariff hikes may not move the revenue needle much in Q4. In mid-November 2022, Bharti discontinued the cheapest plan with 28-day validity (at Rs. 99) in two circles – Haryana and Orissa. Post discontinuation of this plan, the cheapest plan stands at Rs. 155. Bharti subsequently extended these tariff hikes in a staggered manner such that all circles were covered by Mid-March.

Analysts at IIFL Capital Services estimate that the entry-level tariff increase would result in <2% overall mobile revenue boost, assuming 20% subscriber churn (of the estimated 50 million subscribers on this plan) and the remaining 80% ending up paying ~55% higher ARPU. Full benefit from this would accrue only by Q1FY24, given that the price hike was staggered over Q3 and Q4FY23.

Bharti may see flattish growth in mobile EBITDA on a sequential basis. Analysts at IIFL Capital Services estimate Bharti to have added 5.5 million 4G subscribers in Q4 versus 6 million in Q3. Two fewer days in Q4 will impact sequential growth. There could be some increase in network opex cost due to rapid 5G rollouts, which may keep EBITDA flat. It was business as usual for non-mobile segments during the quarter.

Airtel Africa may see flattish EBITDA sequentially, given that Q4 is a seasonally weak quarter for Airtel Africa. On revenue weighted average basis, African currencies depreciated by ~1.2% QoQ versus USD. Analysts at IIFL Capital Services estimate flattish sequential growth in revenue and EBITDA.

Rs Million	March 2023 estimates	YoY change	QoQ change
Revenue	360,674	14.5%	0.7%
EBITDA	184,293	14.9%	(0.1)%
Profit After Tax (PAT)	28,023	39.6%	76.4%