Q4 metrics show Bharti Airtel withstanding industry churn better


When Bharti Airtel Ltd released its statutory financial results earlier this month, the Street didn’t get a complete picture of the operating performance. The company did not share segmental details due to rights issue related compliance restrictions. The company released these details on Thursday and operating metrics show notable improvement, which should impress investors.

Consolidated revenues continue to inch up. Operating profit in March quarter increased about 6% from December quarter. The sequential expansion in earnings underscores a notable improvement in the mainstay India business.

Operating profit at India mobile services business jumped 31.6% sequentially. Margins expanded from 19% to 24%. The improvement reflects cost control and revenue optimization measures.

Average revenue per user at India wireless business saw a noticeable improvement from ?104 in December quarter to ?123. The expansion comes on the back of introduction of minimum recharge plans, aimed at weeding out non-paying users. But analysts at Kotak Institutional Equities point out the subscriber churn at Bharti Airtel is much lower than Vodafone Idea Ltd.

Growth in data usage is also impressive at 15%. The operating metrics show Bharti Airtel is withstanding the competition better. “We like the directional moves in several metrics and believe Bharti is making the most of the window of opportunity provided by Vodafone Idea (VIL) being busy with integrating two large networks,” Kotak said in a note.

Importantly, Bharti Airtel is catching up on the network expansion on 4G coverage. Mobile broadband towers grew 4.7% sequentially. More than 95% of the company’s tower network now is equipped with broadband. “Bharti is still behind Reliance Jio on LTE coverage and capacity but is catching up quick and smart,” analysts at Kotak added.

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