Shreyansh V. Shah, Research Analyst, StoxBox views on Bharti Airtel posted tepid results in Q4FY24

Impacted by the devaluation of the Nigerian Naira, Bharti Airtel posted tepid results in Q4FY24. However, the company was still able to improve ARPU to Rs. 209, the highest in the industry, owing to their focus on upgrading customer plans, a better mix and the addition of high-value customers. The India business continued its healthy growth trajectory led by higher realizations and strong 4G/5G customer additions during the year. The company has effectively defended its market share of subscribers and gained a larger slice of the revenue pie, all while adopting a more restrained approach to 5G rollout compared to rivals, notably Jio. With a 15-17% price hike expected post elections, Bharti’s ARPU is poised to grow to new highs. Even excluding this hike, the ARPU is forecasted to grow, propelled by factors such as incremental tariff adjustments, ongoing conversions from 2G to 4G, migration from prepaid to post-paid plans, increased data consumption per user, and the allure of bundled offerings inclusive of OTT services. As we advance, the company’s progress on 5G adoption, capex trajectory, prepaid to postpaid conversion trends, and traction in home broadband will be key monitorable.

Bharti Airtel Ltd. Q4FY24 Result First Cut – Devaluation of the Nigerian Naira weighs on financial performance; ARPU growth continues

•  Company reported revenue of Rs. 36,009 crores, up 4.4% YoY / down 0.8% QoQ in Q4FY24, below market expectations of Rs. 38,607 crores owing to currency devaluation impact in Africa.
• India revenues for Q4FY24 stood at Rs. 28,513 crores, an increase of 12.9% YoY. Domestic mobile revenues grew 12.9% YoY, led by a rise in 4G/5G customers (28.6 million YoY and 7.8 million customers QoQ) and an increase in ARPU.
• ARPU for the quarter stood at an industry-leading Rs. 210 in Q4FY24 compared to Rs. 208 in Q3FY24 and Rs. 193 in Q4FY23 on consistent strategy of acquiring high-value customers, improved realizations and pricing strategies.
• The mobile data consumption was up 25% YoY, with consumption per customer at 22.6 GB per month.
• Total customer base stood at 562 million in Q3FY24 compared to 551 million in Q3FY24.
• EBITDA rose 4.2% YoY / down 2.3% YoY to Rs. 19,590.5 crores, while EBITDA margin stood at 52.1% (down 12bps YoY / up 78bps QoQ) in Q4FY24. India’s EBITDA margins improved to 53.6% (up 56 bps YoY) in Q4FY24.
• Profit after Tax stood at Rs. 2,072 crores (down 31.1% YoY / down 15.2% QoQ) in Q4FY24, missing market expectations of Rs. 3,274 crores owing to higher tax expenses.
• Net Debt to EBITDA (annualized) stood at 2.61x as on 31 March, 2024 compared to 2.59x in Q3FY24.