Airtel Q1 net profit at Rs284 cr, ARPU at Rs146; lockdowns weigh

Bharti Airtel posted a consolidated net profit of Rs 284 crore in the April-June quarter, a sharp fall sequentially with its India wireless business dragged by Covid-induced lockdowns, which led to the telco losing users, even as consumers at the lower end of the market spent less on calls.

Net profit for the quarter fell from Rs 759 crore in the January-March period, with muted average revenue per user (ARPU) growth due to a sharp slowdown in 4G net user adds because of the Covid second wave. The telco had posted a loss of Rs 15,933 crore a year back.

ARPU, a key performance parameter for telcos, grew to Rs 146 from Rs 145 in the March quarter. The telco’s consolidated revenue grew 4.3% sequentially, and 15% on-year to Rs 26,854 crore.

Airtel also said that Nisaba Godrej, chairperson and managing director of Godrej Consumer Products Ltd., will join the Board of the telco as an Independent Director frpm August 4.

“India is recovering from the devastating second wave of Covid-19… Ebitda margins improved from 48.9% to 49.1%,” Gopal Vittal, managing director of Bharti Airtel, India, South Asia, said in a statement Tuesday.

He added that the telco’s wireless revenues were hurt by Covid lockdowns and slowdown in terms of device shipments and a financial squeeze at the lower end of the market.

In the just ended quarter, Airtel lost 135,000 users on a net basis to end with 321.23 million users. Its total quarterly net 4G user adds too fell to 5.3 million from 13.7 million recorded in the January-March period, and 12.9 million in October-December.

These, though, were partly offset by a 12.4% on-quarter growth in data usage per customer to 18.93 GB, indicating that people continued to use the telco’s mobile broadband network while working from home. Voice minutes of usage per user though dipped 0.8% on-quarter to 1044 minutes.

Airtel’s overall India revenues increased 11% on-year to Rs 18,828.4 crore, which was also higher than Rs 18,337.8 crore reported in the previous quarter. But India mobile revenue growth was muted at Rs 14,305.6 crore, just a tad more than Rs 14,079.7 crore in the March quarter.

Net loss, before exceptional items, of Airtel’s India operations widened sequentially in the April-June period to Rs 297.2 crore from Rs 136.1 crore.

The telco’s consolidated net profit, its third successive quarter in the black after six straight losses, was also dragged by 5.8% sequential increase in finance costs as net debt at March end rose to around Rs 1.6 lakh crore from around Rs 1.5 lakh crore in the previous quarter.

Rival Reliance Jio, which reported results on July 23, was largely unaffected by Covid and saw good traction on customer acquisitions, adding as many as 14.4 million 4G users in the June quarter. The telecom market leader’s fiscal first-quarter net profit rose 39% on-year and 3.9% sequentially, to Rs 3,502 crore with an ARPU of Rs 138.4.

Vodafone Idea (Vi) is yet to report its quarterly earnings.

The Sunil Mittal-led telco’s shares closed nearly 2.7% higher at Rs 580.20 on the BSE Tuesday. The company’s earnings were announced after market hours.

“Despite subdued cellular revenues, strong growth in Africa/Home services drive the on quarter growth. EBITDA surprised positively led by lower network opex leading to 2%/2% beat on our/consensus numbers,” BoFA Securities said in a note.

“The flattish net adds appear to be led by COVID second wave – though Bharti materially underperformed Jio who added 14 million net adds (Jio also benefited from Jio featurephone traction),” the brokerage added.

On a consolidated basis, Airtel – with operations in 16 countries, including India, Sri Lanka and 14 African nations - expanded its overall customer base to 474 million users from 471 million at the end of March FY21.

The latest quarterly earnings numbers come after the Supreme Court, last month, denied telcos any relief on the adjusted gross revenue (AGR) front, which has left Airtel saddled with Rs43,980 crore in total AGR dues, of which it has so far paid only Rs 18,004 crore. The balance needs to be paid through March 31, 2031.