Q1FY23 Preview: Bharti Airtel: Revenue seen at Rs323,026 million; PAT at Rs23,823 million

6 Aug 2022 , 09:51 PM

Result date: 8th August
Recommendation: Buy
Target Price: Rs811

Analysts at IIFL Capital Services forecast a quarter of improved performance for Bharti Airtel. Higher diesel costs are likely to have an adverse impact on its margins. Sales & Distribution costs are also expected to be higher for the company in the quarter. Increase in smartphone costs due to chip shortages and supply chain disruptions are expected to have an adverse impact on 4G subscriber additions for the company. It is estimated that the company added 2.5 million 4G subscribers in the June quarter as against 5.2 million 4G subscribers in the March quarter. Non-mobile business of the company, such as DTH business, is expected to post steady performance. On QoQ basis, EBITDA of African business is expected to be flat. Subscriber verification process in Nigeria is expected to have adverse impact on its performance in the quarter.  Depreciation in African currencies during the quarter will also have its negative impact on the financial performance of the company.

Total consolidated revenue during the June quarter is forecasted at Rs323,026 million.  This will be a y-o-y growth of 20.3%. Profit After Tax (PAT) is forecasted at Rs23,823 million. This will be a y-o-y growth of 740.3%.

Key management insights to look into:

• 5G services rollout
• Details of new subscriber additions
• Performance of the Africa busines

	June 2022 estimate	Y-o-Y	Q-o-Q
ARPU (India business in Rs)	181	23.9%	1.7%
Consolidated Revenue (Rs mn)	323,026	20.3%	2.5%
Consolidated EBITDA (Rs mn)	162,426	25.1%	1.3%
EBITDA margin	50.3%	195 bps	(64) bps
PAT (Rs mn)	23,823	740.3%	18.7%

Source: IIFL Research