Update On Bharti Airtel By Yes Securities
Result Highlights Bharti Airtel‐Consolidated
* Revenue: Bharti’s consol. revenue at Rs 257.4 bn (+12% YoY; ‐3% QoQ), stood in‐line with estimates. While the YoY growth was largely driven by 13% growth in India mobile customer base and 7% increase in ARPU, offset by switch to ‘Bill & Keep’ regime. The QoQ drop in revenue was mostly on account of sequentially 1% weaker ARPU and elimination of IUC revenue.
* Operating Profits: EBITDA at Rs 123.3bn, stood higher by 28% YoY and 2.3% QoQ. While YoY growth was primarily driven by 7% YoY higher India mobile ARPU, was also aided by 1% YoY and 7% QoQ drop in operating expenses. The total Ebitda for FY21 stood 28% YoY higher at Rs 453.7bn.
* Profit/(Loss) After Tax: On after tax basis, Bharti Reported a Profit of Rs 15.1 bn vs. a loss of Rs (49.7) bn in 4QFY20 and profit of Rs 13.5bn in 3QFY21; The company however still ended the year in red with after tax loss of Rs 124bn, primarily on account of exceptional expense of Rs 159.1bn.
* Exceptional Item: The company reported an exceptional gain of Rs 4.4bn during the quarter, still leading to an annual exceptional loss of Rs 159bn for the FY21. The exceptional gain during the quarter stood on account of a) reversal of impairment of intangible assets, b) reassessment of useful life of network assets and c) reassessment of contractual/regulatory levies.
* Customer Base: The total customer base on consolidated basis stood at 471mn a net addition of 48mn customers on YoY basis and 13mn on QoQ basis.
* Debt: The Net‐debt for FY21 stood at 1485bn (+19% YoY), implying a Net‐debt to equity of 2.5x (FY20: 1.6x) and Net‐Debt/EBITDA of 3.2x (FY20: 3.6x). While core borrowings are just ~38% of gross debt (Rs 1623bn), with remaining being deferred payment liability (Rs 682bn) and lease obligation (Rs 330bn), but high levels of borrowing remain an overhang.
India Mobile business
* Revenue: India mobile revenue at Rs 140.8bn stood + 8.7% YoY but ‐4.7% QoQ; While, the QoQ drop stemmed from elimination of IUC regime, the YoY growth was led by a stronger customer base (+13% YoY) and improvement in ARPU (+7% YoY) moderated by absence of IUC revenue
* EBITDA: stood at Rs 66.9bn (+31% YoY; +3.6% QoQ); primarily on higher ARPU; Absence of IUC revenue was offset by removal of IUC charges; being a net IUC payer, Bharti benefited from the adoption of Bill & Keep regime.
* Capex: Total India Capex stood 46% YoY and 5% QoQ lower at Rs 51.4 bn (of which mobile business: Rs 37.4bn) on addition of new sites and towers Infrastructure: During the quarter the company added 8300 towers and 38438 broadband stations, taking the total to 217K towers and 607K broadband stations
* Operating Cashflow: stood 31% QoQ higher at Rs 29.5bn, taking the cumulative for the year at Rs 96bn (+430% YoY)
* ARPU: stood at Rs 145 vs Rs 135 last year same quarter and Rs 146 in previous quarter (adjusted for IUC)
* Subscriber base: The total India consumer base stood at 350mn, a net addition of 14mn subscribers QoQ; of which the mobile subscriber base stood at 321mn, a net addition of 13mn subscribers
* Data subscriber base increased by 13mn QoQ to 188.6mn, on continued up‐trading by consumers and new additions
* Data traffic improved by 9% QoQ to 9.2 tnMB; however, data usage per customer was largely flat on sequential basis at 16.8GB
* Voice traffic also improved by 8% QoQ to 997bn minutes; voice usage per customer however stood largely flat at 1053mins
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