Telecom operator Bharti Airtel's consolidated net profit dipped 2.8% to ₹830 crore for the third quarter ended December 2021 from ₹854 crore in the same quarter year ago. Shares of Bharti Airtel rose to ₹710 apiece on the BSE in Wednesday's opening deals.
Bharti Airtel's 3QFY22 results were encouraging with consolidated revenues, up 13% year-on-year (YoY) and EBITDA up 22% both ahead of its estimates, said Jefferies in a note. Its average revenue per user (ARPU) during the quarter increased to ₹163.
“Bharti's 6% sequential rise in India mobile ARPUs was the key positive surprise in 3Q. Bharti's subscriber mix improved further; a reflection of its network investments. Homes, enterprise segment and Africa also surprised positively," it added. Jefferies has reiterated Buy rating on the telecom stock with a target price of ₹910 per share.
The brokerage believes that Bharti's focus on raising tariffs/ARPUs will keep its churn high, particularly among voice subscribers, but the change in mix will drive up its ARPUs.
"Our Enterprise, Homes and Africa business continue to deliver strongly, with steady increase in contribution to the overall mix of the portfolio," Bharti Airtel MD and CEO for India and South Asia Gopal Vittal said in the release.
Domestic brokerage Motilal Oswal also has Buy rating on Bharti Airtel shares on Steady EBITDA growth and winning market share with Africa business also witnessing strong growth.
“Africa continued its healthy EBITDA growth trend with 5% QoQ growth, backed by all-round growth in Data and Airtel Money consistently over the past few quarters. It generates ₹400– 500 m FCF and remains a low-leverage, healthy, growing biz. The stock is up 3x in the last six quarters, which adds a 10% upside for Bharti," the brokerage added.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
