Bharti Airtel Q2 Results: Sixth Straight Quarterly Loss Even As ARPU Improves
The Bharti Airtel Ltd. logo sits on company’s retail store in Mumbai, India. (Dhiraj Singh/Bloomberg)

Bharti Airtel Q2 Results: Sixth Straight Quarterly Loss Even As ARPU Improves

Bharti Airtel Ltd. reported a loss for the sixth consecutive quarter even as its average revenue per user improved to over a three-year-high.

Net loss of the Sunil Mittal-owned telecom operator stood at Rs 763 crore in the quarter ended September compared with a net loss of Rs 15,933 crore in the preceding three months, according to an exchange filing. Analysts’ estimates compiled by BloombergQuint had pegged the profit at Rs 126.6 crore.

In the previous quarter, Airtel had seen its net loss widen as it set aside one-time provisioning of Rs 10,744 crore to pay for adjusted gross revenue liabilities as mandated by the Supreme Court of India.

  • Revenue rose 7.7% sequentially to Rs 25,785 crore in the July-September quarter, compared with the Rs 24,571.8-crore forecast.

  • Operating profit rose 11.3% to Rs 11,848 crore.

  • Margin expanded 46% from 43.5% in the April-June period.

  • Average revenue per user—the amount Airtel earns per subscriber per month—rose to Rs 162 from Rs 157.

Indian telecom was one of the very few sectors that remained shielded from a major impact due to the Covid-19 pandemic. Barring a slower subscriber growth and lower recharges, telecom firms were relatively unaffected from the pandemic.

However, their woes were aggravated after an October 2019 ruling said non-core revenue must be included while calculating statutory levies. The change in definition increased liabilities of Airtel and Vodafone Idea Ltd. to north of Rs 90,000 crore.

With the Supreme Court now having granted telecom operators 10 years to stagger and clear of their dues, analysts have said that Bharti Airtel is well placed to benefit due to its healthy cash flows.

“Bharti Airtel remains in a sweet spot in the current environment to tap the increase in Ebitda opportunity — either from price hike required by Vodafone Idea to stay afloat (more likely) or from market share gains in case Vodafone Idea shuts operations,” Motilal Oswal said.

Besides, the company’s Africa unit reported 13.3% quarter-on-quarter revenue growth in the three months ended September. Net profit, too, rose 54.3% sequentially. Its customer base rose 4.4% over the preceding quarter to 116.4 million.

Shares of Bharti Airtel closed 0.17% lower before the results were announced, compared with a 1.03% gain in the benchmark Nifty 50 Index.

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