Shares of Bharti Airtel rose as much as 2.2 per cent to Rs 579 on the BSE after it reported 15.4 per cent year-on-year (YoY) jump in consolidated revenues to Rs 23,939 crore for the June quarter of FY21 (Q1FY21). The company's losses, however, expanded to Rs 15,933 crore for the quarter, mainly due to a massive AGR-related provisioning.
Airtel has made an incremental provision of Rs 10,744 crore (including net interest on total provision created considering interest rate based on the affidavit filed by the DoT), which has been presented as an exceptional item. According to Department of Telecommunications (DoT) calculations, Airtel owes Rs 43,780 crore in adjusted gross revenue (AGR) dues, of which Rs 18,004 crore has been paid.
The firm, however, posted an over two-fold jump in profit before tax (PBT) of Rs 372 crore for the quarter before exceptional items. The company's data traffic growth surged 73 per cent YoY -- thanks to people working from home -- even as 4G net addition slowed to 20 lakh, "caused by supply chain shocks in the device ecosystem".
Airtel’s average revenue per user (Arpu) also rose to Rs 157 a month in Q1FY21 from Rs 129 in Q1FY20. Revenue from India mobile operations rose 36 per cent sequentially to Rs 17,589 crore.
On the operational front, Earnings before interest, tax, depreciation and amortisation (Ebitda) stood at Rs 10,639 crore, while Ebitda margin came in at 44.4 per cent.
At 9:50 AM, the stock was trading 1.44 per cent higher at Rs 574.50 as compared to 0.6 per cent gain in the benchmark S&P BSE Sensex. It was trading close to its all-time high level of Rs 611.70, hit on May 20, 2020. A total of 1.3 crore shares have changed hands on the NSE and BSE combined so far.
Motilal Oswal maintained its 'BUY' rating on the stock, saying Airtel's Q1 performance was 'better-than-expected'.
"India Mobile Ebitda saw 3 per cent QoQ growth, against our anticipation of about 6 per cent India Mobile Ebitda decline due to the lockdown related revenue loss, thus reflecting healthy recovery in the month of June 20. Moreover, subscribers saw minimal 40 lakh fall against our expectation of 2.8 crore fall, while 4G subscribers saw 20 lakh adds, (despite Airtel’s far more stringent subscriber accounting v/s peers); 4G subs adds and mix drove Arpu increase in sight.," it said.
The brokerage highlighted the company's healthy network capacity and said it has also resumed the trend of positive free cash flow (FCF). Meanwhile, "near-term risk of AGR liability payment remains," Motilal Oswal said.
CLSA also maintained its 'BUY' rating on Airtel with the target price of Rs 715, saying the Q1 revenues, led by India mobile revenue, were ahead of estimates.