Bharti Airtel Limited, usually known as Airtel, is an Indian multinational telecommunications services company based in New Delhi. It operates in 18 countries across South Asia and Africa, as well as the Channel Islands. Currently, Airtel provides 4G and 4G+ services all over India and 5G service in selected cities. Currently offered services include fixed-line broadband, and voice services depending upon the country of operation. Airtel had also rolled out its VoLTE technology across all Indian telecom circles. It is the second largest mobile network operator in India and the second largest mobile network operator in the world. Airtel was named India’s 2nd most valuable brand in the first ever Brandz ranking by Millward Brown and WPP plc.
Airtel is credited with pioneering the business strategy of outsourcing all of its business operations except marketing, sales and finance and building the ‘minutes factory’ model of low cost and high volumes. The strategy has since been adopted by several operators. Airtel’s equipment is provided and maintained by Ericsson, Huawei, and Nokia Networks whereas IT support is provided by Amdocs. The transmission towers are maintained by subsidiaries and joint venture companies of Bharti including Bharti Infratel and Indus Towers in India. Ericsson agreed for the first time to be paid by the minute for installation and maintenance of their equipment rather than being paid upfront, which allowed Airtel to provide low call rates of ₹1/minute.
Quarterly Earnings Walkthrough
Bharti Airtel’s consolidated net profit has spiked by 58% to Rs 2614 crore for the December quarter from Rs 1651 crore in the December quarter of the previous year. The mobile average revenue per user (ARPU) per month increased to Rs 193 in Q3FY23 as against ₹163 in Q3FY22.
On a sequential basis, the topline has grown by a mere 4%, while the bottomline has declined by a deadly 47%.
The telecom giant’s revenue from operations has risen by 20% to Rs 35,804 crore during the December quarter as compared with Rs 29,867 crore in the December quarter of the previous year.
The consolidated operating profit, known as EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) has been computed at Rs 18,085 crore along with the operating margin being enhanced by 205 basis points on a yearly basis to 52%.
Airtel’s India customer base was reported at 369 million as of December end. On the consolidated basis, the total customer base was about 511 million.
Airtel is performing 5G investments for attracting high-value consumers. The company is in the process for the expansion of its 4G network to put up a strong rivalry against Jio’s population coverage.
Word from the Board
Bharti Airtel MD, Gopal Vittal said in a statement that “Postpaid, Enterprise, Homes as well as our Africa business sustained their momentum while the DTH business showed signs of growth in an industry that continues to be under pressure. Our overall performance is testimony to the breadth and diversity of our portfolio that spans across both geographies as well as businesses. Our 5G rollout is on track to cover all towns and key rural areas by March 2024”.
Cloud solutions
Bharti Airtel made an announcement on Wednesday for a strategic partnership with cloud computing company Vultr to provide cloud solutions to enterprises in India. Airtel is looking forward to offering Vultr’s extensive suite of cloud solutions to its enterprise customers with the support through this partnership.
The new services will aid the customers in the digital space. It will help them to achieve easy global reach and cost-performance advantage to build, test, and run demanding cloud workloads.
Technical Analysis
Bharti Airtel stock price has made a break over its 161.8% retracement level. The next target for the stock price is the 261.8% retracement level at Rs 1030. This target could be achieved in the mid-term to long-term. The price has overextended above the 200-day exponential moving average which indicates us that the stock is highly expensive, however the weekly MFI is at 34 points which indicates that the stock has corrected to a swing low and the price is relatively cheap for an entry into a long swing trade.
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