Q4FY22 Preview: Bharti Airtel: Revenues seen at Rs320,041 million, PAT at Rs23,961 million

16 May 2022 , 04:04 AM

Result date: 17^th May, 2022
Recommendation: Buy
Target price: Rs844
 
Bharti Airtel’s results for the March 2022 quarter will reflect the full benefit from price hikes taken in December 2021. The company could witness highest sequential growth in mobile revenues relative to its peers. It is estimated to have added 2.5 million 4G subscribers in the quarters versus 3 million in the December 2021 quarter. This marks a sharp climb-down from the ~10 million run-rate in the preceding 6 quarters, despite this period being impacted by two COVID-related lockdowns. Thus, the Average Revenue Per User (ARPU) tailwind from 2G to 4G upgrade is likely to be subdued in the March 2022 quarter.

There could be some impact from SIM consolidation/down-trading, ~85% pre-paid revenue and two lesser days in the quarter, leading to sequential revenue growth of 13% in the mobile business. This, coupled with steady performance of the non-mobile business and a seasonal weakness in Africa business should culminate into a 7.2% sequential increase in revenues during the quarter.

While the domestic business’ EBITDA could grow 15% sequentially, flat EBITDA of Africa business would pull down growth in EBITDA to 11%. 1% sequential depreciation in African currencies vis-à-vis the USD could keep revenue and EBITDA flat in USD terms. The company’s mobile business could register 19% growth in EBITDA, despite some rise in network operational expenses, considering the full impact from the accelerated tower additions in December 2021 quarter.

Important management insights to watch out for:

• Outlook on demand across all segments and markets
• Margin levers

 

Rs Million	March 2022 estimates	YoY change	QoQ change
Revenue	320,041	24.3%	7.2%
EBITDA	162,961	32.1%	10.8%
Profit After Tax	23,961	215.6%	188.8%

Source: IIFL Research