Airtel shares down 1.8% after telco reports lower Q4 profit vs Q3

Started by devikad, May 18, 2021, 06:04 PM

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Airtel shares down 1.8% after telco reports lower Q4 profit vs Q3

 Bharti Airtel shares were down nearly 1.8% Tuesday morning trade on BSE, a day after the Sunil Mittal-led telco's net profit for the March quarter fell 11% sequentially in the October-December period, with ARPU dragged by the absence of interconnection usage charges (IUC).

India's No 2 mobile carrier, though, posted a consolidated net profit of Rs 759 crore in the January-March period - its second successive quarter in the black after six straight losses - backed by a one-time gain and continued strong subscriber additions.

Airtel shares were down 1.8 % to Rs 539.80 in BSE mid-morning trade.

From January 1, IUC had become zero from 6 paise a minute. This, along with lesser number of days ion the quarter, dragged Airtel's ARPU to Rs145 from Rs 166 in the December quarter, pulling quarterly consolidated revenue down 2.9% on-quarter to Rs 25,747 crore.

"Airtel's IUC-adjusted ARPU our view Bharti benefitted disproportionately in 2Q/3Q at the expense of Jio and now that trend is reversing," BofA Securities said in a note.

The global brokerage added that Airtel's EBITDA "missed its consensus nos due to on-quarter increase in license fee, network expenses. "EBITDA was up only 2.3% qoq and was 2.6% below our estimate."

BNP Paribas said Airtel has increased its network investments in 2H21, which, along with higher diesel cost, resulted in higher network costs". It added that Airtrel also added 8.3k network towers in 4QFY21, the highest in its history, which also resulted in a 7.6% increase in network operating cost on quarter.

UBS said that "adjusted for IUC, Airtel's mobile revenues were up 4.2% QoQ, which was mainly driven by strong 4G subs addition during the March quarter.

The Swiss brokerage, however, said, Airtel added fewer mobile users compared to Jio, adding 13.4 million subs in Q4, including 13.7million 4G subs compared to Jio's 15.4 million net user adds during the quarter.

UBS added that Bharti added "274k FBB (fixed broadband) subs during the March quarter, the highest-ever quarterly addition, although this was offset by an ARPU decline from Rs 705 to Rs 684".


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