Bharti Airtel shares slip 2% after Q1 results

Kolkata: Bharti Airtel shares fell almost 1.7% in Wednesday morning trade to Rs 570.65 on BSE, a day after the Sunil Mittal-led telco’s consolidated net profit fell nearly 63% sequentially to Rs 284 crore in the June quarter, with its India wireless business dragged by Covid lockdowns that led to the company losing users, even as consumers at the lower end of the market spent less on calls.

The telco’s net profit in the fiscal first quarter fell also due to a sharp slowdown in 4G net user adds during the Covid second wave. The telco’s ARPU, a key performance parameter, crept up to merely Rs 146 from Rs 145 in the March quarter.

Goldman Sachs said Airtel’s sequential wireless revenue growth at 2%, “has been seeing a decelerating trend,” but with “no material Covid-related headwinds in September ‘21, and a positive impact from recently announced tariff changes, we forecast Bharti to report +6% on-quarter wireless revenue growth in 2QFY22”.

Going forward, the global brokerage expects an uptick in Airtel’s ARPU in the coming quarters as a result of recent tariff changes, continued (user) upgrades from 2G to 4G, and a potential tariff hike in the lucrative prepaid smartphone segment. At present, the prepaid smartphone users segment garners 60% of Airtel’s revenues.

BNP Paribas said Airtel’s India mobile revenue growth was muted as the subscriber base was flat QoQ and operators gave certain benefits to low-end consumers amid the pandemic.

Bharti Airtel lost 1,35,000 users on a net basis in the June quarter to end with 321.23 million users. Its total quarterly net 4G user adds also fell to 5.3 million from 13.7 million recorded in the January-March period, and 12.9 million in October-December.