Bharti Airtel may return to black in Q3, revenue to grow over 15%: Analysts

 Management commentary on the timing of tariff hikes and outlook on spectrum investments including renewals will be among the key things to watch in Airtel's results

Bharti Airtel is set to announce its December quarter results of FY21 (Q3FY21) on Wednesday amid expectations of strong earnings in which the telecom operator may return to profit while revenues may grow in mid-teens on a year-on-year (YoY) basis, mainly on account of strong subscriber addition momentum. During the quarter under review, Airtel recorded 6.3 per cent YoY growth in subscribers to 30.1 crore, with data subscribers rising 24.6 per cent YoY to 17.3 crore.

Airtel had reported net sales of Rs 21,947.1 crore and a loss of Rs 1,112.3 crore in the year-ago quarter. In Q2FY21, it had reported a loss of Rs 713.9 crore.
"There are four key things to watch out for in Bharti Airtel's results: management commentary on the timing of tariff hikes, outlook on spectrum investments including renewals, network rollouts and capex outlay to cater to higher traffic on network, and comments on review petition filed against AGR ruling," global brokerage Jefferies said in a result preview note.

Last week, Airtel Africa reported a 13 per cent YoY growth in net profit at $116 million for the quarter ended December 31, 2020 (driven mainly by growth in ARPU) while revenue was up 17 per cent YoY to $1,034 million.

At the bourses, Bharti Airtel zoomed 17.89 per cent in the quarter under review. In comparison, the Nifty50 index rallied 24 per cent in the same period, ACE Equity data show.

Here's what leading brokerages expect from Airtel's Q3FY21 numbers:
Jefferies
According to analysts at Jefferies, Bharti Airtel's India mobile revenues for Q3FY21 may grow 5 per cent sequentially to Rs 14,500 crore, on the back of better 4G adds, with slight margin expansion (up 90 bps QoQ to 43.5 per cent) due to operating leverage. Further, they expect Airtel's average revenue per user (ARPU) to be up 1.5 per cent QoQ to Rs 165 on the back of continued data subscriber additions.

In a result preview note, Jefferies said that Airtel's non-mobile segments should see stable growth; however, de-consolidation of Indus Towers for part quarter will lead to a 1 per cent sequential decline in revenues from Indian operations.

Overall, it expects Airtel's consolidated revenues to decline marginally (down 0.4 per cent sequentially) to Rs 25,700 crore. On a YoY basis, however, the same would grow 17 per cent. Consolidated Ebitda margins are expected to be flat sequentially at 45.5 per cent while Ebitda may rise 26 per cent YoY to Rs 11,700 crore.