Bharti Airtel Ltd., India’s second-largest telecom company, navigated a challenging fourth quarter of fiscal 2024, as reflected in its financial performance. Despite resilient subscriber additions and a modest increase in average revenue per user (ARPU), the company faced headwinds that impacted its profitability and revenue growth, leading to a mixed bag of results.
Revenue for the quarter fell slightly short of analyst expectations, coming in at Rs 37,599 crore, a marginal decline of 0.8% from the previous quarter. The company cited currency devaluation in Africa as a contributing factor to this shortfall. Consolidated revenue from operations, however, rose by 4.4% to ₹375.99 billion rupees ($4.5 billion), indicating a resilient operational performance amid challenging market conditions.
Despite efforts to mitigate challenges, Bharti Airtel reported a notable decline in net profit for the fourth quarter. The company’s net profit dropped by 28% sequentially to Rs 2,068 crore, missing analysts’ estimates. However, the reported net profit of ₹2,071.6 crore was slightly higher than the CNBC-TV18 poll projection of ₹2,050 crore. The decline in profitability can be attributed to an exceptional charge reported by the company.
On the operational front, Bharti Airtel showcased strength in subscriber additions, with its India customer base standing at 56.19 crore subscribers across 16 countries. The company’s average revenue per user (ARPU) witnessed a modest increase, reaching ₹209 compared to ₹208 in the previous quarter. This suggests a positive trend in monetization strategies despite the competitive landscape.
Market response to Bharti Airtel’s quarterly results was initially positive, with the company’s shares gaining as much as 2.13% in morning trading. Analysts, however, displayed a mixed outlook on the company’s performance. While two brokerages maintained a neutral rating, two others raised their recommendations to ‘buy.’ Jefferies, in particular, assigned a ‘buy’ rating and raised the target price to ₹1,590 per share, reflecting a potential upside of 23% from Tuesday’s close. The brokerage highlighted the telco’s encouraging performance, citing strong subscriber additions, mix improvement, and higher mobile ARPU as positive indicators.
Bharti Airtel’s fourth-quarter results underscore the challenges and opportunities inherent in the telecom industry landscape. Despite facing headwinds such as currency devaluation and profitability pressures, the company demonstrated resilience through its operational performance, subscriber growth, and ARPU expansion. Looking ahead, continued focus on innovative strategies to drive revenue growth and enhance profitability will be crucial for Bharti Airtel to maintain its competitive edge in the dynamic telecom market.
Rashi Seth provides sharp insights into business trends, innovations, and strategies. With a keen eye for navigating the corporate world, she empowers readers with valuable knowledge and inspiration. Follow her for the latest in entrepreneurship and industry developments.