Bharti Airtel down 1% despite robust India mobile growth in Q2FY24; brokerages ‘buy’ rating

Bharti Airtel’s fiscal second quarter revenue grew 7 percent on-year to Rs 37,044 crore, with a 10 percent on-year growth in India business to Rs 26,995 crore while Net profit fell 37.5 percent on-year to Rs 1,341 crore.

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Bharti Airtel shares fell 1.35 percent to Rs 902.35 on November 1, even as the telecom giant’s Q2 FY24 financial results left brokerage analysts impressed with subscriber growth and India mobile services performance. Revenue and EBITDA grew more than expected (year-on-year), while net profit fell mainly due to exceptional items.

Bharti Airtel’s fiscal second quarter revenue grew 7 percent on-year to Rs 37,044 crore,  with a 10 percent on-year growth in India business to Rs 26,995 crore. Earnings before interest, taxes and depreciation and amortisation grew to Rs 19,665 crore. EBITDA margin for the period expanded 176 basis point on-year to 53.1 percent. Net profit for the quarter fell 37.5 percent on-year to Rs 1,341 crore.

Jefferies issued a ‘buy’ call on Bharti Airtel stock, with a target price of Rs 1,085 per share, on its continued encouraging performance in Q2 and higher postpaid/4G Subscriber additions. Further, moderation in capital expenditure going ahead will support deleveraging of $7 billion from the company’s books through FY 2025-26, adding to stock returns, said the brokerage.

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Bharti Airtel reported a 69 percent overall increase in mobile customer base in July-September with 4G/5G data customers up by 27.2 million on-year, and up 7.7 million quarter-on-quarter.

CLSA also issued a ‘buy’ call on Bharti Airtel stock with a target price of Rs 1,110 per share on the back of the robust revenue and EBITDA performance.

Bharti Airtel grew its Mobile services ARPU to Rs 203 during July-September, from Rs 190 in Q2 FY23. For Q2 FY24, the Digital TV customer base was 15.7 million.

Also read: Bharti Airtel Q2 profit plunges 38% to Rs 1,341 crore; ARPU at Rs 203

Motilal Oswal also gave a ‘buy’ rating to Bharti Airtel stock, saying that in the Q2 FY24 results, the Home business was the silver lining. “The business continues to grow steadily in the last 12 quarters,” the brokerage said in a note.

“It has expanded in 1,234 cities versus merely 100 cities in FY20 with 2.5x growth in subscribers in the last three years,” it said, adding that the further growth acceleration could also come through the  new Xtream AirFibre launch.

In a post earnings release, Gopal Vittal, MD, Bharti Airtel said, “This has been yet another quarter of solid revenue growth and improved margins. Our performance is underpinned by a simple and consistent strategy of focusing on quality customers and delivering the best experience to them in a seamless digital way.”

Also read: MC Pro Inside Edge | A ringside view of the inner goings-on of Dalal Street: What stocks veteran bulls are eyeing, what the bears are ganging up against, secret deals and more

While the telecom provider saw growth in its Africa subscriber base, it reported a decline in revenue by 9.2 percent and EBITDA by 8.7 percent to Rs 10,300 crore and Rs 51,000 crore due to Naira devaluation.

Analysts may update their estimates post the earnings call on November 1.

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