Bharti Airtel Q3 Results: Profit up 483% to ₹14,760 cr on Indus consolidation | Stock Market News

Bharti Airtel Q3 Results: India’s second largest carrier Bharti Airtel Ltd beat estimates with a profit of ₹14,760 crore for the quarter ended December, up 483% from ₹2,530 crore a year earlier, due to a one-time gain from Indus Towers becoming its subsidiary in November.

The company recorded a net exceptional gain of ₹9,267 crore, which included gain of ₹14,322.5 crore on account of consolidation of Indus, gain of ₹128.5 crore from reversal of provision created for input tax credit on passive infrastructure services and foreign exchange gain of ₹1,193.6 crore. The exception gain was offset by regulatory levies of ₹6,358.6 crore and impairment charge of intangible assets of ₹1,740.4 crore. Airtel accounts for Indus Towers operations under passive infrastructure services.

In a separate announcement, Indus Towers said Thursday that it was acquiring 16,100 towers, ultra lean sites and cell on wheels from parent Bharti Airtel and fellow subsidiary Bharti Hexacom Ltd, through a slump sale for ₹3,308.7 crore. Expected to be completed by March-end, the sale will be done at arm’s length and will help the company add more towers to its portfolio of 234,643 towers, improving its market share.

Adjusted for Indus Towers’ financials, Airtel’s profits rose 121.3% on-year to ₹5,514 crore, with the full impact of the June 2024 tariff hikes coming through and customers moving to higher-priced plans.

Revenue and Ebitda growth

Consolidated revenue for the quarter was ₹45,129 crore, rising 19% on-year, while earnings before interest, tax, depreciation and amortization (Ebitda) was up 24% to ₹24,880 crore in the third quarter ended December. Ebitda margin rose to 55.1% from 52.9% a year prior.

India business revenue ₹ ₹34,654 crore was up 24.6% on-year, in line with market expectations, while Africa revenue rose 2% to $1.26 billion.

The India average revenue per user, a key metric of profitability for telecom service providers, rose 18% to ₹245 in the quarter ended December, from ₹208 in the September quarter. In comparison, India’s No. 1 carrier Reliance Jio’s Arpu rose to ₹203.3 from ₹195.1 in the September quarter. Vodafone Idea is yet to release its December quarter performance.

“Our balance sheet remains solid, supported by robust cash generation, prudent capital allocation and continued deleveraging. During the quarter, we prepaid another tranche of ₹3,626 crore of high-cost spectrum dues. At the same time, we believe the industry needs further tariff repair to ensure sustained investments and long-term value creation,” said Gopal Vittal, vice-chairman and managing director, reiterating the need for further increase in tariffs. Airtel, along with other private telcos, had raised tariffs by 10-21% in June, the third such hike since 2019.

“Homes business saw further step up in customer additions with acceleration of FWA expansion. Airtel Business delivered stable performance but continues to remain challenged,” Vittal said.

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Homes business, which includes home wi-fi, broadband and TV connectivity, saw revenue rising by 18.7% on-year, while its fixed wireless access service saw addition of 674,000 customers to reach to a total base of 9.2 million.

Vittal, who was named Bharti Airtel vice-chairman last quarter, said the company was undertaking a “comprehensive re-tooling” of the Airtel Business portfolio, by stepping up investments in digital services across cloud, security and IoT. It will stop the ‘very low margin’ commodity voice and wholesale business, which would impact the top line of the business in the coming quarters but will have an insignificant impact on margins.

Airtel added 16 million customers in the quarter on-year, taking the total to 413 million customers at the end of 2024. The telecom operator added 25.2 million smartphone data users in the quarter and 0.6 million postpaid users, reaching 25.3 million. The mobile data consumption in India surged 23.2% with average monthly usage reaching 24.5 GB per customer. Airtel’s overall customer base stood at 576 million, with India at 413 million and Africa at 163 million.

Airtel’s shares closed 2.5% down to ₹1619.55 on BSE Thursday even compared with a 0.27% fall in the benchmark Sensex. Indus Towers shares closed 0.49% down at ₹355.95. Bharti Airtel’s earnings were released after market hours.

As part of its financial strategy, Airtel prepaid ₹3,626 crore towards its deferred spectrum liabilities from 2016. “With this, Airtel has now prepaid all its spectrum dues that had interest costs higher than 8.65%,” the company said in its statement to the exchanges.

Airtel’s net debt rose marginally to ₹1.96 trillion in the quarter from ₹1.92 trillion a year ago.

The telco rolled out 5,200 towers and 16,300 mobile broadband stations in the quarter to expand its network footprint and enhance customer experience. Airtel’s spam identification and blocking technology identified close to 252 million unique customers and over 1 million unique spammers, making more than 130 million calls daily. The solution also detected over 7 million spam messages being sent daily.

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