Bharti Airtel: A New Hope

Bharti Airtel started with a gap up opening on 10th August 2022 after the company released their quarterly earnings results on Monday 8th August 2022.

The consolidated net profit jumped up by 465 percent in comparison with the same quarter in the last year which was aided by subscriber additions and higher revenue per user. Sequentially, profit was down by 20 percent. The company seems to be recovering well after the TRAI had imposed a major penalty on the company.

The effects of the COVID pandemic had forced people to consume a lot of data by working from home. Many of the employers continue with their work from home model. The change in the way humans work by using internet from home has made its impact on the financial performance of telecommunication companies and the trend is well maintained with Bharti Airtel with the Q1 earnings results of this year.

The operations of the company in India and Africa are strong. The subscriber base has been growing and the company is hiking tariffs which has helped the company with robust growth in revenues and operating margin.

Earnings Highlights

The Indian business gave a 24 percent rise driven by 13 percent growth in the subscriber base. The ARPU (Average Revenue Per User) was at Rs 183 which is up by 25 percent on a yearly basis.

The Africa business gave an 18 percent rise driven by 9 percent growth in the subscriber base.

The overall EBITDA margin spiked by 150 basis points.

The expansion was the result of significant operating leverage and the operating margins of the India business have expanded by 189 bps.

Strengthening the 4G network

Airtel continues to soar from the weak competition of Vodafone India whose customer base is shrinking every quarter. Bharti Airtel has absorbed an amazing 20.8 million subscribers within a 12-month period.

The company continues to bolster a strong share of the 4G additions in the market. The 4G data customer base has increased 11 percent on a yearly basis to 205 million compared with the last year. The company has set up an additional 8000 towers in the quarter.

Data consumption prevails with users

The pandemic has long passed, yet people continue to spend more of their time online, this is clearly visible through the 5.3 percent yearly jump in data consumption for India.

The growth in Africa has jumped by 24 percent on a yearly basis.

The rising demands of smart phones with their affordability, network coverage improvements and internet content continue to fuel data consumption across all platforms. Airtel with its huge subscriber base enjoys this growth and seems to be in a prime position to absorbs the profits.

Preparations for 5G

After the conclusion of the 5G auction, Airtel has the widest mobile broadband footprint across the country which puts the company in a great position to flag the 5G revolution in India. The company has acquired the 19,867.8 MHz spectrum for a total consideration of Rs 43000 crore. The company will be able to offer the best 5G experience at the lowest ownership cost with the most power efficient solution.

Technical Analysis

Bharti Airtel Weekly Candlestick Chart on the Sharekhan Trade Tiger

Bharti Airtel has taken support at the 23.6% retracement level multiple times and continues to rise towards its lifetime high of Rs 781. Considering MFI is at 52, the growth is healthily steady, and the 5G spectrum, the stock might have a great upside. Investors might find this attractive for the long term.

Disclaimer: We do not endorse you to take trades or investment decisions based upon our posts/research, all of your trading and investment activities are your own and should be taken through consultation with reputed financial advisors. The analysis posted on this website has been created by involving multiple mediums present over the Internet.

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