Should you dial in Bharti Airtel post Q4 results?

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Shares of telecom major Bharti Airtel were trading lower by 1.5% in early trades on May 18, a day after the company declared its Q4 results.

On a consolidated basis, Bharti Airtel’s net profit stood at Rs 759 crore in Q4 March 2021 compared with a net loss of Rs 5,237 crore in Q4 March 2020. The consolidated revenues at Rs 25,747 crore grew 17.6% YoY on a comparable basis and 11.9% YoY on a reported basis. EBITDA rose 28.9% to Rs 12,583 crore in Q4 FY21 over Q4 FY20. EBITDA margin increased to 48.9% in Q4 FY21 compared with 42.4% in Q4 FY20.

The average revenue per user (ARPU) continued to be the best in the industry as Q4FY21 ARPU came in at Rs 145 versus Rs 135 in Q4FY20.

CLSA | Target price: Rs 730 | Upside: 35%

CLSA is of the opinion that the company gained more-than-expected 4G data subscribers. ARPU, net of IUC, although was down 0.8% QoQ and up 7.4% YoY. It feels that 4G penetration of 56% of its own subscribers assures growth.

Citi | Target price: Rs 685 | Upside: 26%

Citi believes that overall, Q4 was in line with India mobile EBITDA a shade below. Adjusted pre-tax profit of Rs 1,580 crore was ahead of estimates. The company’s profit was boosted by Rs 440 crore of net exceptional gains.

Goldman Sachs | Target price: Rs 655 | Upside: 21%

Bharti continues to outperform peers, with the company’s revenue market share higher by 110bps/390bps over the last one/five quarters. Short-term headwinds to earnings due to COVID-19 (moderation in subscriber adds) and competition (ARPU pressure). Bharti’s wireless business to deliver 20%+ revenue and EBITDA growth for the next two years. The market is under-appreciating a ‘market share re-allocation’ scenario, and one of the two outcomes – tariffs moving up, or market share re-allocation, is highly likely in the near term.

UBS | Target price: Rs 655 | Upside: 21%

UBS is of the view that the company posted a healthy set of results, with the telecom firm outperforming Jio on most metrics. Impact of COVID on subscriber adds and ARPUs are the key monitorable going ahead.

(Disclaimer: The recommendations in this story are by the respective research and brokerage firm. Money9 & its management do not bear any responsibility for their investment advice. Please consult your investment advisor before investing.)