Bharti Airtel Q3 PAT falls 55% YoY to ₹6,630.5 crore; ARPU at ₹259

Bharti Airtel, India’s second largest telecom operator by market share, reported a growth of 55%. annual (Annual) to fall as net profit ₹6,630.5 crore On Thursday in the December quarter (Q3).

The decline in profit is largely attributable to the high base in the previous year period when the company reported an exceptional net gain following the reclassification of Indus Towers from associate to subsidiary. Net profit fell 2.4% sequentially in the third quarter. ₹6,791.7 crore in the previous quarter.

The company’s net profit was also affected by the recent implementation of the new labor law. The company said the financial consequences of the new labor laws led to an increase in bonus and paid leave provisions by the following amounts: ₹257 crore.

The telecom operator reported revenue of: ₹53,981.6 crore in the quarter, up 19.61% year-on-year and 3.5% sequentially. This was largely driven by growth in its core mobile services business and focus on premium services, 2G to 5G upgrades, postpaid subscribers and African business.

“Our balance sheet strength, supported by strong cash generation and sustainable debt reduction, positions us well to invest in new growth opportunities,” Gopal Vittal, vice chairman of Bharti Airtel, said in a statement. “India mobile recorded sequential growth of 1.9%, driven by our focus on winning with quality customers and an ever-improving portfolio mix.”

Airtel’s EBITDA increased by 25.2% YoY ₹31,144 crore in the third quarter, sequential increase of 4.1%. The company added 4.35 million mobile users in the quarter, taking its total mobile subscriber base in India to 368.5 million.

Arpu increased by 1.2% respectively ₹259th Arpu in the quarter, driven by growth in data consumption and consumer upgrades ₹256 in the previous quarter. For context, Vodafone Idea’s Arpu was at: ₹172 per month at the end of December, Jio ₹213.70.

Tariff increases, ARPU and AGR dues are in focus

Airtel’s results come at a time when there is no consensus among operators on the next industry-wide tariff increases. While Airtel and Vodafone Idea have called for ‘tariff repair’ in the sector, market leader Reliance Jio has ruled out an immediate increase, signaling its confidence in achieving organic growth in average revenue per user (Arpu) thanks to 5G deployment.

Airtel has also approached the government seeking parity with Vodafone Idea regarding recalculation of adjusted gross revenue (AGR) dues.

Investors will listen closely for updates on Airtel’s stance on tariff hikes, Arpu growth and AGR recalculation during the post-earnings call with analysts on Friday.

Shares of Bharti Airtel ended down 1.7% ₹1,992.20 on the National Stock Exchange on Thursday.