Bharti Airtel Q2 Results Preview: Revenue, Margin To Remain Flat

Bharti Airtel Ltd.'s second quarter revenue and margin growth is likely to remain muted amid delayed tariff hikes.

The country's second largest telecom company is likely to report a sequential revenue growth of 1.75% to Rs 38,096.89 crore, according to consensus estimates compiled by Bloomberg. The margin is expected to remain flat at 52.3%.

However, revenue is likely to see a 10% rise on an annual basis.

The net profit is likely to double on a sequential basis and see an 8.4% rise year-on-year to Rs 3,205.17 crore, according to consensus estimates.

Bharti Airtel reported a foreign exchange loss of Rs 3,416 crore as an exceptional item in the first quarter of FY24, on account of statutory changes made by the Central Bank of Nigeria.

While the average revenue per user, or ARPU, is on an upward trajectory, the telecom industry needs it to rise to Rs 270–300 in the next three to five years to meet future capex needs, according to JM Financial.

"We expect Bharti’s premiumisation strategy to drive 9% ARPU CAGR (to Rs 300 in FY28)—3–4% due to upgrades/data usage and 5-6% due to the regular tariff hike; this is likely to drive 13% Ebitda CAGR over FY23–28," it said.

Kotak Securities highlighted that revenue and operating profit are expected to remain flat sequentially following the Naira devaluation of Airtel Africa.

"Among the other business segments, we expect a robust 5% sequential revenue growth for Homes Broadband (continued strong net adds) and 2% QoQ growth for Enterprise (on a high Q1 base)," it said.

Axis Securities expected Bharti Airtel to post a "healthy recovery", in terms of curtailing losses and reporting a profit. Operating margin is likely to witness marginal expansion due to lower commission costs and sales and marketing expenses, it said.

The company, according to Prabhudas Lilladhar, is also targeting a Rs 50,000 crore market opportunity with its enterprise offerings, including CPaaS, cloud, cybersecurity and data centres, as it expects 80% of corporates to incorporate 5G within the next three years.

Shares of Bharti Airtel closed 1.8% higher on Monday, as compared with a 0.49% gain in the benchmark Nifty 50.