Q1 Results: Bharti Airtel’s Biggest Loss Since Listing Masks Business Recovery
Pedestrians walk past an advertisment for Bharti Airtel Ltd. in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

Q1 Results: Bharti Airtel’s Biggest Loss Since Listing Masks Business Recovery

Bharti Airtel Ltd. reported its biggest loss since going public in 2002. But that masks the underlying recovery the telecom operator has made since it changed strategy to focus on fewer, better-paying users.

Net loss stood at Rs 2,866 crore compared to a profit of Rs 107 crore last quarter, according to the company’s exchange filing. The loss was much higher than the Rs 907 crore estimated by analysts tracked by Bloomberg. It was also the first loss Airtel reported since the December-ended quarter of 2003.

Higher loss was due to an exceptional cost of Rs 1,469 crore for network refarming—redeploying spectrum—and other provisions during the first quarter.

  • Revenue rose 0.65 percent quarter-on-quarter to Rs 20,738 crore.
  • Operating profit rose 24.9 percent to Rs 8,289 crore.
  • Margin expanded more than 7 percentage points to 39.97 percent.
  • Average revenue per user stood at Rs 129 against Rs 105 a year ago and Rs 123 as of March, rising for the third straight quarter.

Billionaire Sunil Mittal’s wireless carrier was among the worst-hit since the launch of Mukesh Ambani’s Reliance Jio Infocomm Ltd. Airtel’s ARPU fell by half in two years of Jio’s arrival. But a shift in strategy to shed flab by deactivating low revenue generating customers and raising prices of its lowest tariff plans are now aiding ARPU.

And adoption of the Ind AS 116 accounting standard also aided numbers. Operating profit was higher by 1,512.3 crore due to Ind AS, while revenue was Rs 26.5 crore higher.

Yet, its Indian business’ performance, even after adjusting for Ind AS, improved due to lower customer churn, increasing data subscribers and higher ARPU.

  • India revenue grew 2.2 percent to Rs 10,867 crore.
  • Domestic operating profit increased 51 percent to Rs 3,874 crore. Adjusting for Ind AS, it stands at Rs 2,518 crore.
  • Adjusted ARPU in India stood at Rs 127, the highest in seven quarters.

Airtel was able to increase its 4G subscriber base to 9.5 crore from 8.7 crore earlier. That was despite cutting down about 15 lakh customers. The churn ratio—average number of customers which quit the network—also declined to 2.6 percent from 2.8 percent.

Other Highlights

  • Consolidated capital expenditure stood at Rs 5,047 crore compared with Rs 6,274 crore in the previous quarter.
  • Net debt, excluding lease obligation, reduced by 22 percent to Rs 88,449 crore versus Rs 1.12 lakh crore.
  • The debt was lower due to fundraising initiatives of the company.

Shares of Bharti Airtel closed 4.1 percent lower ahead of the results announcement compared with the benchmark BSE Sensex’s 1.23 percent fall.

Also read: Bharti Airtel’s Borrowing Costs Rise

Brokerages’ Take

BofA Securities

  • Maintained ‘Buy’ with a price target of Rs 400.
  • June quarter review: once again good India cellular revenue growth.
  • Divergence versus Vodafone Idea visible.

Morgan Stanley

  • Maintained ‘Equal-weight’ with a price target of Rs 360.
  • Indian wireless performance in line.
  • 4G subscriber addition momentum was robust.
  • Adjusted Ebitda of homes and business was better.


  • Maintained ‘Buy’ with a price target of Rs 405.
  • June quarter was operationally ahead; India mobile performance robust.
  • Bharti’s superior execution is clearly driving an improvement in India mobile operations.
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