Bharti Airtel cuts loss by 97% in Q2, logs record quarterly revenue

Ebitda margin up 366 bps YoY at 46 per cent -- highest in at least five quarters

Bharti Airtel said the firm's consolidated net loss for the July-September quarter (Q2) has narrowed sharply to Rs 763 crore, a decline of 97 per cent year-on-year (YoY). The company had posted a consolidated net loss of Rs 23,045 crore in the same quarter last year, after provisioning for the adjusted gross revenues (AGR) dues.

The telco posted the highest ever quarterly revenue, mainly on account of customer addition and higher data consumption. Revenues increased 22 per cent YoY to Rs 25,785 crore compared to Rs 21,131 crore a year ago. While revenues were ahead of expectations, net profit fell short of estimates. A Bloomberg poll had pegged revenues at Rs 24,572 crore and net profit at Rs 121.6 crore. 

The stock closed at Rs 433, down 0.24 per cent on BSE on Tuesday. The results were announced post market hours.

Gopal Vittal, managing director and chief executive, India & South Asia, said: "Despite being a seasonally weak quarter, we delivered a strong performance. In the mobile segment, we added over 14 million 4G customers and grew (India) revenues by 26 per cent. Data consumption grew by 58 per cent YoY, which reflects strong engagement of customers on our network." In India, revenues rose 22 per cent YoY to Rs 18,747 crore. 

Ebitda (earnings before interest, taxes, depreciation, and amortisation) margin was up 366 basis points (bps) YoY at 46 per cent — the highest in at least five quarters. EBIT margin improved by 768 bps YoY at 17.1 per cent.

In the India business, monthly average revenue per user (ARPU), an important matrix to gauge the telco's performance, rose to Rs 162 from Rs 128 a year ago and Rs 157 in the June 2020 quarter. Analysts at Motilal Oswal Securities were expecting ARPU to remain flat sequentially. Voice minutes increased 5 per cent sequentially and 20 per cent YoY, while data consumption was up 5.5 per cent sequentially and 58.5 per cent YoY, in the India mobile services business.

Operationally, the quarter was good. Consolidated EBIT at Rs 4,412 crore (up 121 per cent YoY) was much ahead of analysts' estimates of Rs 2,616 crore. Likewise, cash profit from operations (before derivative and exchange fluctuations) surged 32 per cent YoY to Rs 8,048 crore.

Airtel also announced its exit from Ghanaian telecom market, selling its 49.95 per cent stake to the Government of Ghana. Consequently, it took an impairment charge of Rs 184 crore.

Pursuant to the AGR judgment of the Supreme Court (SC) on October 24, 2019, the group provided for Rs 36,832.2 crore for the periods up to March 31, 2020, on the basis of demands received and the period for which demands had not been received. 

Consolidated net debt, including the impact of leases, stood at Rs 1.38 trillion crore as on September 30, and net debt-Ebitda ratio (annualised) and including the impact of leases was at 2.91 times as compared to 3.30 times a year ago and 2.74 times in the previous quarter.