Bharti Airtel Q4 preview: Sharp dip in PAT likely despite revenue growth

Telecom major Bharti Airtel is scheduled to report its March quarter earnings for financial year 2018-19 (Q4FY19) on Monday. Analysts expect the company to report net loss on a year-on-year (y-o-y) basis, even though its wireless revenues are likely to see a sequential jump following the implementation of minimum average revenue per user (ARPU) plans for low-end customers.

Capex guidance for FY20, mobile broadband subscriber addition, timeline for rights issue and Africa IPO, and other balance sheet deleveraging plans will be the key things to watch in the company's results announcement, analysts say.

Brokerage firm Emkay Global pegs the consolidated loss in Q4FY19 at Rs 854.6 crore, as compared to a profit of Rs 101.7 crore in the year-ago period. Revenue for the quarter under review, the brokerage says, should increase 4.8 per cent YoY at Rs 20,579.4 crore on the back of introduction of minimum recharge plans and stability in data revenues. This, in turn, would also increase the ARPU to Rs 121. 

"Increased network opex, led by aggressive rollouts, should impact earnings before interest, taxes, depreciation, and amortisation (EBITDA) which may dip 12.2 per cent on a YoY basis to Rs 6,085.4 crore. The EBITDA margin is seen to decrease 572 bps YoY at 29.6 per cent. Africa revenue is likely decline 3 per cent on a QoQ basis, impacted by rupee appreciation," the Emkay note says.

Edelweiss estimates the company's revenue to grow 5.5 per cent on a YoY basis and 1 per cent on a QoQ basis to Rs 20,795.6 crore. However, the firm may report core PAT degrowth at Rs 425.8 crore. "Consolidated EBITDA margin expected to marginally improve by 60bps QoQ on account of higher revenue from India business and lower energy cost in India business," the brokerage firm said.

Kotak Securities pegs the company's loss even higher, at Rs 1,200 crore, even though it is expects Bharti Airtel to generate a consolidated revenue of Rs 20,200 crore, an increase of 3 per cent YoY. EBITDA, too, is seen declining 13 per cent YoY to Rs 6,060 crore. In terms of India wireless business, Kotak sees a modest 1 per cent sequential uptick in revenues to Rs 10,290 crore. 

"Underlying assumption of stable QoQ revenues in the mobile broadband (MBB) segment and marginal uptick in revenues from 2G subs, led by full-quarter impact of the ‘minimum recharge construct’. Reported ARPU will likely see a sharp 14 per cent qoq uptick to Rs120/sub/month, largely optical on account of the sharp subs base clean-up done in Dec 2018. We expect India wireless EBITDA of Rs 2,010 crore. We bake in modest uptick in voice volumes and 20 per cent qoq growth in data volumes," analysts at the brokerage firm said.