Bharti Airtel Q1 profit rises 158% to ₹4,160 cr, boosted by exceptional items

Bharti Airtel, India’s second-largest telecom services provider, on Monday posted a net profit of ₹4,160 crore for the quarter ended June, doubling sequentially and jumping 158% from a year ago, mainly due to exceptional gains from a favourable tax judgement, and divestment of its Sri Lankan operations.

The Sunil Mittal-promoted telecom operator's consolidated revenue during the quarter rose nearly 3% to ₹38,506 crore. Sequentially, it was 2.4% higher.

Earnings before interest, tax, depreciation and amortization (Ebitda) came in at ₹19,944 crore, up 1% y-o-y, while Ebitda margin declined to 51.8%.

“Our stringent focus on driving cost efficiencies is reflected in strong operating leverage. Africa continues to deliver strong underlying constant currency revenue growth. India operations added 6.7 million smartphone customers and reported an improved ARPU (average revenue per user) of ₹211. Our postpaid strategy continues to yield results with 0.8 million net adds,” said MD and CEO Gopal Vittal in a statement detailing the quarterly results after market hours on Monday.

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Bharti Airtel stock settled 1.6% lower at ₹1,469 on NSE on Monday.

“The industry saw much needed action on tariff repair, which is positive for industry’s financial health amid ongoing large network capex. We continue to believe that industry needs over ₹300 ARPU at the minimum for financial stability," Vittal said, referring to the tariff hikes undertaken by all carriers including Airtel in June. Analysts and sector experts have said that the full effect of the tariff hikes on ARPUs is expected to be seen in the second and third quarters of the current financial year.

Market estimates

Profit for the quarter was higher than market estimates due to exceptional gains totalling ₹1,235 crore that came from a waiver of interest by the Supreme Court on tax treatment of adjusted gross revenue (AGR)-linked variable licence fee payable to the telecom department amounting to ₹1,399 crore and divestment of Airtel Lanka operations that amounted to ₹275 crore, set off against losses of ₹938 crore from currency fluctuations, especially Nigerian Naira, impacting African operations. The telco got a net tax benefit of ₹327.8 crore and ₹172 crore were allocated to non-controlling interest.

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African operations reported a profit of ₹30 crore in the quarter, compared to losses of ₹788 crore in the same quarter last year, due to currency devaluation, while revenue shrunk to ₹9,636 crore in the June quarter from ₹11,316 crore in the same period a year ago.

On a standalone basis, the telco’s India and South Asia operations saw net profit of ₹4,087.6 crore, up from ₹2,265 crore a year ago. Revenue rose 10.1% to ₹29,130 crore, led by 6.7 million 4G and 5G customer additions and improvement in customer mix with 4G and 5G customers making up 73% of its total customer base of 409 million.

Increase in ARPU

ARPU, a key metric of profitability, increased sequentially to ₹211 from ₹200. In comparison, the country's largest telecom firm Reliance Jio’s ARPU was flat sequentially.

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“We continue to deliver industry-leading ARPU growth along with growing average data usage per data customer. We strengthened our leadership position in postpaid segment with net adds of 0.8 mn in Q1’25 thereby reaching a customer base of 24 million. Our market share in smartphone segment saw sustained improvement with addition of 29.7 million, increase of 12.9% YoY,” the telco said in the statement.