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Yes Securities Report
Bharti Airtel Ltd. reported broadly inline performance for the quarter. The sequential revenue growth was slightly below expectation; while Ebitda margin was as per estimates.
It reported sequential revenue growth of (1.1%) QoQ, led by adverse impact from devaluation of Nigerian currency. India mobile subscriber base increased by 3.7 million QoQ to 342.3 million; while average revenue per user increased by 1.5% QoQ to Rs 203/month.
Number of 4G Data Customer Base increased 3.4% QoQ to 237.5 million. Postpaid subscriber addition was highest ever at 979,000 QoQ.
It continues to gain subscribers at broadly steady rate and has been gaining market share at the expense of Vodafone Idea Ltd.
It continues to maintain industry leading ARPU and that denotes its superior customer mix. We expect that 2G to 4G migration, prepaid to postpaid conversion, higher data usage, increasing international roaming penetration and tariff increase going ahead would continue to drive ARPU growth.
Other businesses such as Airtel Business, African operations, Home Services are witnessing strong traction.
We expect Ebitda margin to improve in near term led by continued focus on operational efficiency.
We estimate revenue compound annual growth rate of 11.8% over FY23‐25E with average Ebitda margin of 52.2%.
We maintain our 'Add' rating on the stock with target price of Rs 1050/share based on SOTP method.
The stock trades at enterprise value/Ebitda of 8.5 times/7.0 times on FY24E/FY25E.
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