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Bharti Airtel continues to report industry leading KPIs in Q2FY23

ICICIdirect Research 03 Nov 2022 DISCLAIMER

What's Buzzing 

Bharti Airtel put up a robust performance with healthy growth on ARPUs and margin improvement. 


Overall India revenues were at Rs 24333 crore, up 4.3% QoQ, largely driven by healthy traction in India wireless business. Airtel’s India ARPU at Rs 190, up 3.6% QoQ (vs. 2% growth expectations), was driven by higher number of days and subscriber mix improvement. We highlight the overall ARPU improvement was better than Jio, which saw ~0.9% QoQ growth in ARPU. Overall sub base saw a modest addition of 0.5 mn QoQ at 327. 8 mn. It witnessed healthy 4G Net adds of ~5 mn during the quarter, with 4G data sub base at 210.3 mn (overall data customers base of 219.1 mn). The postpaid subscriber base also saw robust addition of ~283,000 subscribers at 18.3 million (mn). Consolidated EBITDA margins of 51%, were up 57 bps QoQ led by India wireless margins which were at 52.4% (up 116 bps QoQ), driven by lower SUC charges after new spectrum purchase. 

Our Perspective 

Bharti Airtel continues to report resilient numbers especially on the Indian wireless business front. The improvement in ARPUs and continued margin expansion remain a key positive. The non-wireless business momentum along with Africa performance, continues to be robust. The company maintained its stance of near term tariff hike, to boost return ratios. It is also looking to accelerate post-paid customer base (riding on weak competitive position of Vodafone Idea) and expand rural coverage to bridge gap with Jio. Favourable industry structure of three players (two being strong), government relief, tariff hike and fund raise puts Airtel in sweet spot to maintain its relative strength among peers with a formidable digital ecosystem offering.

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