Signage of Airtel Ltd. seen at one of its outlet in Bengaluru, India. (Photographer: Anirudh Saligrama / BloombergQuint)

Bharti Airtel’s Third Quarter In Five Charts

Bharti Airtel Ltd.’s average revenue per user rose for the first time in 10 quarters aided by new strategies.

The key profitability metric for India business rose 4 percent sequentially—the biggest jump in 23 quarters—to Rs 104 in the three months ended December. That’s because India’s second-largest telecom operator deactivated connections of customers who bought recharge plans of less than Rs 35 a month and focused on improving services for higher-paying users.

This recovery, however, came at the cost of subscribers. Bharti Airtel lost more than 4.8 crore subscribers in the December quarter—the highest since its listing in 2002.

While the rise in average revenue per user suggested a recovery in sight, a one-time gain helped billionaire Sunil Bharti Mittal-led company to post a surprise profit.

Net profit stood at Rs 86 crore in the quarter ended December, aided by an exceptional gain and deferred tax assets. Analysts had expected the company to report a loss. Revenue, too, rose marginally over the previous quarter led by its Africa business.

In the third quarter, Bharti Airtel’s dependency on its African unit increased a bit more as its earnings before interest, tax, depreciation and amortisation surpassed that of the Indian arm for the first time since its acquisition. The Africa unit’s Ebitda rose to Rs 2,187 crore compared with Indian mobile unit’s Rs 1,950 crore. The rise in Ebitda can be attributed to growth in revenue and cost cuts. Operational growth in the African unit bodes well for Bharti Airtel as it is looking to list the unit by July.

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Back home, tough competition eroded Bharti Airtel’s industry-leading margin. The company’s Ebitda margin reported for India mobile business dropped below the 20-percent mark for the first time. The Ebitda margin during the third quarter stood at 19.1 percent—half of what it was before the launch of Reliance Jio Infocomm Ltd.

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Bharti Airtel’s consolidated debt in the October-December period fell by Rs 6,800 crore for the first time in six quarters on the back of a fund infusion by the African unit. The African unit raised close to $1.25 billion from six investors by selling close to a third of its stake. But despite the fall in debt, the company’s leverage ratio remained elevated due to fall in its Ebitda.

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