Bharti Airtel on Thursday reported a marginal quarter-on-quarter decline in net profit for the October–December quarter, as higher exceptional charges and increased provisions weighed on the bottom line, even as operating performance improved sequentially.
The telecom operator posted a consolidated net profit of Rs 6,631 crore, down 2.4% from Rs 6,792 crore in the September quarter and below Bloomberg consensus estimates of Rs 7,157 crore. Profit before exceptional items stood at Rs 6,920 crore, reflecting steady operating momentum during the quarter. The sequential decline in reported profit was primarily driven by higher exceptional charges, including provisions linked to new labour codes, rather than any change in business fundamentals.
During the quarter, Airtel recognised provisions of Rs 256.8 crore towards gratuity and compensated absences following the implementation of new labour codes, partly offset by a tax credit of Rs 65 crore. These charges had a direct impact on net profit on a quarter-on-quarter basis.
Regulatory Headwinds
Consolidated revenue rose 3.5% sequentially to Rs 53,982 crore from Rs 52,145 crore in Q2, beating Bloomberg’s estimate of Rs 53,480 crore. Growth was led by the India mobile business, supported by continued premiumisation and steady traction in home broadband services.
Earnings before interest, tax, depreciation and amortisation increased 4.1% quarter-on-quarter to Rs 31,144 crore, ahead of Bloomberg’s estimate of Rs 30,455 crore. Ebitda margin improved to 57.7% from 57.4% in the previous quarter, aided by operating leverage and disciplined cost management.
Revenue from the India business grew 1.4% sequentially to Rs 39,226 crore, supported by higher mobile revenues, sustained momentum in the homes segment and stable performance in Airtel Business. Mobile services revenue increased 1.9% quarter-on-quarter to Rs 28,652 crore, driven by an improvement in average revenue per user and continued additions of smartphone customers.
Average revenue per user, a key metric for telecom operators, rose to Rs 259 in Q3 from Rs 256 in the September quarter, reflecting an improving subscriber mix. Airtel continues to report a higher Arpu than peers, with Reliance Jio and Vodafone Idea reporting Arpu of Rs 213.7 and Rs 186, respectively, based on their latest available disclosures.
On usage metrics, total data traffic on Airtel’s network rose 6.6% quarter-on-quarter to 26.06 billion GB, while voice traffic increased 1.3% sequentially to 1.26 trillion minutes. Average monthly data consumption per user stood at 29.8 GB, compared with Reliance Jio’s 40.7 GB.
Net additions in the postpaid segment moderated to 0.62 million subscribers during the quarter from 0.95 million in Q2, taking the total postpaid base to 28.1 million. Around 79.8% of Airtel’s subscriber base now comprises 4G and 5G users.
Digital Frontier
Commenting on the performance, Gopal Vittal, executive vice-chairman of Bharti Airtel, said the company’s focus on quality customers and portfolio mix continued to drive growth. “The India mobile business growth was driven by our focus on winning with quality customers and by consistently improving the portfolio mix, adding 4.4 million smartphone customers,” Vittal said in a statement.
The homes business maintained strong momentum during the quarter, crossing a quarterly revenue run-rate of Rs 2,000 crore, with net additions of 1.2 million customers, the highest ever in a single quarter. During Q3, Airtel added 1,147 towers and 16,338 mobile broadband base stations, expanding network capacity to support growing data demand.
Airtel Business, the company’s B2B arm, reported a 1.5% sequential increase in revenue. During the quarter, the telco entered into a strategic partnership with Google to set up a $15-billion artificial intelligence hub and data centre in Visakhapatnam, Andhra Pradesh.