Bharti Airtel Income to Grow by 15% CAGR over FY22-24: Jefferies

Bharti Airtel’s average revenue per user (ARPU) grew to Rs 153 sequentially in the September quarter. Sequentially here means QoQ.

Highlights

  • The cash flow position for the company will improve significantly as the telco has opted for payment moratorium.
  • With the easing cash flow situation, Bharti Airtel will be very confident going into the 5G era.
  • Bharti Airtel recently came out with the September quarter results.

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Bharti Airtel

Bharti Airtel recently came out with the September quarter results. The telco’s consolidated profits grew by almost four times quarter-on-quarter. This was helped by the one-time spectrum sale to Reliance Jio. According to analysts, the income of Bharti Airtel should compound by 18% annually in the FY22-24 period. This will be due to the increasing 4G penetration across the country. Further, the telco will also increase tariffs in the near future which will help majorly as well.

In a note, Jefferies said that Airtel is expected to deliver 15% CAGR in revenues and 18% CAGR in EBITDA in the FY22-24 period. The brokerage firm made the estimates based on the assumption that there will be around 7% tariff hikes in Q4 FY22 and Q4 FY23.

Bharti Airtel ARPU Rose to Rs 153

Bharti Airtel’s average revenue per user (ARPU) grew to Rs 153 sequentially in the September quarter. Sequentially here means QoQ. The telco’s increase in revenues and profits was helped by the removal of the Rs 49 prepaid plan across the country. Users had no other option but to stick with the Rs 79 plan if they wanted to keep using Airtel’s services for minimal costs.

The cash flow position for the company will improve significantly as the telco has opted for a payment moratorium of AGR and spectrum dues for four years. Further, Bharti Airtel recently concluded a rights issue of Rs 21,000 crore. As per Nomura Research, the rights issue is going to help Bharti Airtel with Rs 480 billion in cash flow.

With the easing cash flow situation, Bharti Airtel will be very confident going into the 5G era. The telco will be able to make more aggressive investments very comfortably as it will have the cash to do so. 5G is further going to help Bharti Airtel improve enterprise and business revenues. The ARPU growth for the telco looks solid and is the best in the industry.

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