Airtel Q1 FY23 net profit soars five fold to Rs 1607 cr

Bharti Airtel’s consolidated net profit zoomed 466% to Rs 1,607 crore for the quarter ended June 2022 from Rs 284 crore the same quarter last year, with revenues rising by more than 22% to Rs 32,805 crore on the back of adding 4G customers and low cost 5G spectrum. 

The No 2 carrier with 362 million customers saw its earnings before interest, tax, depreciation and amortisation rise by 26% on-year to Rs 16,604 crore, with margins expanding by 1.5 percentage points to 50.6% in the quarter. 

The Sunil Bharti Mittal promoter carrier’s average revenue per user—a key measure of profitability—was Rs 183 for the quarter, the highest among its rivals. It was 25.4% more than Rs 146 in the same quarter last financial year, and 2.8% more than Rs 178 in the March quarter, on account of acquiring and retaining quality customers. 

Revenue from its India business rose 24% on-year to Rs 23,319 crore while mobile revenues rose 27% to Rs 18,220 crore from Rs 14,305 crore in the same quarter last year, on account of increase in ARPU and strong 4G customer additions during the year. 

“This has been another solid quarter. We continue to deliver strong and sustained growth at 4.5% sequentially. EBITDA margins are now at 50.6%. Our enterprise and homes business has strong momentum and delivered strong double-digit growth, improving the diversity of the overall portfolio. Airtel’s strategy of winning with quality customers continues to yield good results with an industry beating ARPU at Rs 183,” said Gopal Vittal, managing director and chief executive officer said. 

The carrier said that it added 20.8 million 4G customers to its network over last year, an increase of 11.3% on-year, while average data usage per mobile data customer rose to 19.5 GBs per month and voice usage per customer rose to 1,104 mins per month. 

Airtel rolled out additional 8,000 towers in the quarter while voice over Wi-Fi adoption has been scaled up to improve indoor experience. “We now have 44 million customers using our Vo-Wi-Fi services,” the carrier said. 

Airtel will begin launching 5G services in key cities before panning out across the country on the back of what it called an ‘industry best existing pool of spectrum.’ “Our long term spectrum acquisition strategy has ensured that we are able to offer the best in class 5G experience at the lowest cost of ownership with the most power efficient solution,” it noted. 

Airtel said in a statement that it would not need to spend any material sum on spectrum for many years after having acquired 19,867.8 MHz airwaves in the 3.5 GHz, 26 GHz bands and the low and mid-band spectrum, for Rs 43,034 crore, while keeping away from high cost 700 MHz spectrum. 

“As India gets ready to launch 5G, we are well positioned to raise the bar on innovation. We are also confident of meeting the emerging needs of discerning customers looking for speed, coverage and latency. Our astute spectrum strategy over the last few years as we bolstered mid band spectrum is designed to deliver the best experience at the lowest total cost of ownership,” Vittal added. 

The carrier’s net debt increased marginally to Rs 1.67 trillion in the quarter ended June FY23 from Rs 1.59 trillion in corresponding quarter last fiscal. 

Airtel’s free cash flow was at over Rs 10,200 crore on a consolidated basis for the June quarter, rising from Rs 6,598 crore in June last year. During the quarter, the capex spend was Rs 6,398 crore, down from Rs 6590 crore in the same quarter previous fiscal. 

Finance costs were up on a consolidated basis to Rs 4,384 crore for the quarter, up 7% on-year. 

The carrier said that Airtel Xstream, one of its key digital assets, has achieved 2 million paid subscriber milestone and is now India’s fastest growing OTT aggregator platform. 

During the quarter, Airtel Payments Bank expanded its total customer base to 139 million with monthly transacting users (MTU) of over 44 million.