PL First Cut - Bharti Q1

PL First Cut – Bharti Q1 - Swarnendu Bhushan – Co-Head of Research, Prabhudas Lilladher Pvt Ltd

Bharti Q1 First Cut: Another strong outperformance

# Bharti reported better than expected Q1 results with Consol EBIDTA/PAT attributable to Bharti of Rs196.0 (+4.8%QoQ; PLe Rs188.5bn) and Rs 16.2bn (-46.4%QoQ; PLe Rs21.5bn). Bharti recognised an exceptional foreign exchange loss of Rs34.2bn. PAT decline was partly softened by lower tax expenses and –ve NCI share.

# India mobile business was strong with Revenue and EBIDTA of Rs203.9bn (PLe Rs198.1bn) and Rs111.7bn (+7.8%QoQ; Ple Rs105.2bn).

# Q1 ARPU reached the Rs200 mark (PLe: Rs196; Jio Rs181) and net subscriber addition was at 3.2mn (Q4FY23: 3.2mn; PLe 3.0mn; Jio 9.2mn). 4G customer addition was at an impressive 5.6mn vs 7.4mn in Q4 given the aggressive strategies of JIO.

# Q1 Africa revenues was at $1.2bn (+6.5%QoQ) with ARPU was at $2.5 (+2.5%QoQ).

# Home services Q1 revenue was at Rs11.6bn (PLe Rs11.4bn) and EBIDTA was at Rs5.9bn (Ple Rs5.8bn). Q1 ARPU was at Rs608 (Q4FY23: Rs614).

# Airtel business Q1 revenue was at Rs50.5bn (PLe Rs49.7bn) and EBIDTA was at Rs19.9 (PLe Rs 20.4bn). EBIDTA margin was at 39.5% (Q4FY23 41.1%).

# DTH continues to disappoint with Q1 revenue at Rs 7.4bn (PLe 7.3bn) and EBIDTA of Rs4.3bn (PLe 4.1bn). Q1 ARPU was at Rs154 (Q4FY23: Rs 155).

# Q1 Consol capex was at Rs104.9bn vs Rs114.4bn in Q4FY23.

# Overall very strong operational performance driven by improved subscriber mix.