Bharti airtel Q4 preview: Low profit business exports to enjoy revenue, ARPU sees flat
Telecom operators plan to announce their fourth quarter results for the fiscal year 2024-25 (Q25 of 4FY25).
Airtel’s consolidated revenue is expected to grow by 31% year-on-year (YOY) and 9% quarter-quarter (QOQ) to ₹According to the average estimate of five brokerage firms, $4920 billion. This growth is attributed to the addition of subscribers, the full integration of the Indian Tower and the strong performance of its core Indian and Airtel Africa businesses.
Since November 19, 2024, India Tower has been considered a subsidiary of Bharti Airtel, transferred from its previous partner status.
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“We expect 4Q revenue to be affected by Bharti, the exit from the low-margin wholesale voice business, partly consolidated by a full three months of Tata revenue in India,” analysts at BOFA Securities said in a note on April 7 in BOFA Securities. The business accounts for 13% of Airtel’s revenue and is expected to decline in the quarter.
Despite the headwinds of the corporate sector, Airtel’s basic business drivers are expected to remain strong. India’s cellular revenue is expected to increase by 2.5% in turn to ₹The brokerage said the division contributed 58% to Airtel’s overall revenue.
In the January-March quarter, Airtel is expected to report a 167% increase in net profit ₹55.31 million. However, by the way, net profit is expected to fall by 63%, mainly due to the extraordinary gains gained from the merger of the River Indus Towers last quarter.
Income from interest, taxes, depreciation and amortization (EBITDA) is expected to grow by 39%, while 9.4% QOQ will increase to 9.4% ₹269.17 million. However, “EBITDA margins are expected to fall by 184 basis points (block points) QOQ to 52.7% as revenue from Q3FY25 is related to the writes of the Indus Tower,” said analysts at Centrum.
Bharti Airtel’s average revenue per user (ARPU) is a key performance metric that is expected to remain flat in turn ₹According to estimates from six brokerage firms, 245.
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“The rise in ARPU will be modest in 4Q due to fewer days,” said Nomura Brokerage analyst. The flat ARPU also shows the impact of tariff rate hikes carried out by telecom operators last July.
“Basically, the ARPU drivers are basically smartphone upgrades, prepaid upgrades, data monetization and growth in international roaming,” Gopal Vittal, vice chairman and managing director of Bharti Airtel, said in a February analyst call.
During the quarterly review, Airtel estimated to add 3 million users, increasing its mobile subscriber base in India to about 360 million. This was an increase of 4.9 million in the previous quarter.
“We expect higher dividend spending in FY25 vs FY24, with the outlook for capital expenditures in FY26 below FY25, and reiterates balancing capital allocations to reduce debt and pay back shareholders,” brokerage firm Morgan Stanley said in a note on April 7.
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During the earnings call scheduled for May 14, analysts and investors will closely review Bharti Airtel’s guidance on key issues, including its equity conversion recommendations with the government, Spectrum deals with Adani, Adani, future tariff hiking and dividend plans.
