Mumbai, February 6, 2024: Bharti Airtel, India’s leading telecom operator, reported a robust increase in net profit for the third quarter (Q3) of FY24, surpassing analyst expectations. However, despite favorable financial results, the company’s stock price experienced a downturn.

Key financial highlights: Bharti Airtel

• Net profit increased by 54% year-on-year (YoY) to ₹2,442 crore, surpassing analyst estimates of ₹3,200 crore.
• Revenue: Grew by 6% YoY to ₹37,900 crore, with partial impact from currency devaluation in Africa.
• Average Revenue Per User (ARPU): Marginally rose to ₹208 from ₹203 in Q2 FY24.
• Customer Base: Expanded by 4% YoY to 34.56 crore.
• 4G/5G Data Customers: Reached 24.5 crore, marking a YoY increase of 2.82 crore.

Positive Performance Amidst Challenges:

Bharti Airtel’s Q3 results demonstrated robust growth in net profit and ARPU, indicating strong demand for its services. The company witnessed increased mobile data usage and expanded its customer base, contributing to these encouraging figures. Notably, Bharti Airtel successfully reduced its consolidated net debt, indicating improved financial stability.

Stock Price Decline:

Despite the favorable financial performance, Airtel’s stock price on the Bombay Stock Exchange (BSE) closed 3% lower at ₹1,113.1. Analysts attribute this decline to lower-than-expected revenue growth and profit figures compared to their forecasts. Additionally, intense competition in the telecom sector and potential challenges like rising input costs may have raised investor apprehensions.

Analyst Perspectives:

While acknowledging the positive aspects of the results, analysts advise considering potential challenges. Motilal Oswal recommends a “buy” stance, citing Airtel’s strong market position and robust ARPU growth. However, Macquarie maintains an “outperform” rating while cautioning about competition and macroeconomic uncertainties.

Looking Ahead:

Bharti Airtel’s performance in Q3 reflects its upward trajectory. However, sustaining momentum amidst competition and economic uncertainties will be critical. The company’s future success depends on strategic initiatives, operational efficiency, and seizing opportunities in areas such as 5G deployment and digital services.