The profit after tax (PAT) is estimated to be between Rs 4,570 crore and Rs 5,217 crore for Q2FY25, reflecting a year-on-year (YoY) growth of 103% to 254%.
These earnings estimates have been provided by Axis Securities, Kotak Institutional Equities, Nuvama Institutional Equities, JM Financial, and Centrum Broking.
Bharti Airtel is expected to report revenue between Rs 40,822 crore and Rs 41,591 crore, reflecting a year-on-year growth of 10% to 12%.
Among the brokerages, Centrum is the most conservative in its revenue and PAT growth projections, while Kotak is the most bullish.
The second-largest Indian telecom company by subscriber base will announce its earnings on Monday, October 28, 2024.Here’s what brokerages recommend:
Axis Securities
Axis Securities projects Airtel’s revenue growth at 11% YoY and 6.5% QoQ, reaching Rs 41,009 crore. The net profit for Q2FY25 is estimated at Rs 5,138 crore, indicating a potential increase of 145% YoY and 9% QoQ.
Earnings Before Interest and Taxes (EBIT) is expected to be around Rs 21,449 crore, reflecting a 10% increase YoY and 9% QoQ. Meanwhile, the EBIT margin is projected at 52%, down by 99 bps YoY and 18 bps QoQ.
This brokerage anticipates QoQ improvement due to rising Indian mobile and digital revenue. A strong service mix and higher ARPU may support margin gains, while robust customer additions and 4G conversions from 2G are also expected in the quarterly results.
Kotak Equities
According to Kotak Equities, revenue for the July-September quarter is expected to rise by 12% YoY and 7% QoQ to Rs 41,334 crore, driven by the India wireless segment (+11% QoQ) due to higher ARPU following tariff hikes.
Profit After Tax (PAT) could increase by 254% YoY and 14% QoQ, reaching Rs 4,743 crore.
Airtel is anticipated to report an EBITDA of Rs 22,426 crore, reflecting a 15% YoY and 14% QoQ increase. The EBITDA margin for the quarter is estimated at 54.3%, showing a growth of 157 bps compared to Q2FY24.
“We model 2.5 million wireless net additions (up from 2.3 million QoQ) and 7 million 4G net additions (up from 6.7 million QoQ). We expect ARPU to rise to Rs 233 (from Rs 210 QoQ) and EBITDA margin improvement of 310 bps due to tariff hikes,” Kotak’s preview note stated.
“Among other segments, we anticipate a robust 5.5% sequential revenue growth for Homes Broadband (driven by strong net additions), +1.7% QoQ revenue growth for Enterprise (+9% YoY), and 1% QoQ growth in Airtel Africa,” the note added.
Nuvama
Nuvama estimates an 11% YoY revenue increase in Q2, reaching Rs 41,541 crore, with a 7% rise QoQ. The company’s core PAT is expected to be Rs 5,217 crore, reflecting gains of 76% over Q2FY24 and 78% over Q1FY25.
EBITDA is projected to be around Rs 22,147 crore, reflecting a 12% YoY and 10% QoQ growth.
“We anticipate 6.9% QoQ revenue growth, with the India business expected to grow by 8.8% QoQ and the Africa business by 2.1% QoQ (in INR terms). The India mobile services sector is projected to grow by 10.9% QoQ, driven by an increase in ARPU and the addition of 3.5 million subscribers,” Nuvama stated.
Consolidated EBITDA margin is expected to expand by 170 bps QoQ.
Key factors to monitor include progress on 5G adoption, capex trajectory, trends in prepaid-to-postpaid conversions, and traction in home broadband.
JM Financial
JM Financial projects revenue around Rs 41,591 crore, reflecting an 11% YoY and 7% QoQ growth. PAT is expected at Rs 4,570 crore, representing a 241% YoY increase and 10% QoQ.
EBITDA is estimated to rise by 10% YoY and 9% QoQ to Rs 21,802 crore. The EBITDA margin is pegged at 52.4% for Q2FY25, indicating a decline of 68 bps YoY but an increase of 78 bps from the April-June quarter.
“We anticipate a wireless subscriber loss of 2 million, but robust additions in MBB/4G/5G subscribers at 6.5 million.”
ARPU is expected to grow to Rs 231, up from Rs 211 in Q1FY25, driven by tariff hikes and improved subscriber mix, along with an extra day in the quarter.
India wireless revenue is projected at Rs 24,700 crore, reflecting a 9.5% QoQ increase. “We are assuming an addition of 340k households in FTTH,” the JM note stated.
Centrum Broking
Centrum estimates revenue at Rs 40,822 crore, reflecting a 10% YoY and 6% QoQ increase. PAT is projected at Rs 5,103 crore, showing a 103% YoY growth and a 41% rise QoQ.
The brokerage expects EBITDA margin at 53%, which represents a 35 bps YoY uptick and a 185 bps increase QoQ.
“Bharti Airtel is anticipated to lose 1 million subscribers QoQ, bringing the total to 354 million. However, ARPU is expected to grow by 8% QoQ to Rs 228/month (industry-leading ARPU), driven by recent tariff hikes and the ongoing migration from 2G to 4G. The company is expected to report around 6% sequential revenue growth, well supported by other business segments,” a Centrum note stated.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)
