Top Indian Companies: Bharti Airtel Limited

Bharti Airtel Limited, also known as Airtel, is an Indian multinational telecommunications services company based in New Delhi, India.

It operates in 18 countries across South Asia and Africa, as well as the Channel Islands. Airtel provides 2G, 4G LTE, 4G+ mobile services, fixed line broadband and voice services depending upon the country of operation.

Airtel had also rolled out its VoLTE technology across all Indian telecom circles. It is the second largest mobile network operator in India and the third largest mobile network operator in the world.

In 1984, Sunil Mittal started assembling push-button phones in India. In 1992, he successfully bid for one of the four mobile phone network licences auctioned in India. His plans were finally approved by the Government in 1994 and he launched services in Delhi in 1995, when Bharti Cellular Limited (BCL) was formed to offer cellular services under the brand name AirTel.

Airtel provides broadband internet access through DSL, internet leased lines and MPLS (multiprotocol label switching) solutions, as well as IPTV and fixed line telephone services.

Airtel Broadband provides broadband and IPTV services. Airtel provides both capped as well as unlimited download plans. The maximum speed available for home users under the new V-Fiber program is up to 300Mbit/s and with DSL is 16Mbit/s.

The Digital television business provides Direct-to-Home (DTH) TV services across India under the brand name Airtel digital TV. Airtel Payments Bank was launched in January 2017. Bharati Airtel is part of Nifty50 index with a weightage of 2.27%.

Shareholding Pattern

The Shareholding Pattern page of Bharti Airtel Ltd. presents the Promoter's holding, FII's holding, DII's Holding, and Share holding by general public etc.

Holder's Name No of Shares % Share Holding

NoOfShares 5884314930 100%

Promoters 2109640745 35.85%

ForeignInstitutions 1139622076 19.37%

BanksMutualFunds 693206409 11.78%

Others 194304883 3.3%

GeneralPublic 109581273 1.86%

FinancialInstitutions 453292063 7.7%

ForeignPromoter 1181599934 20.08%

GDR 3067547 0.05%

FY2023 Q4 and Full Year Results

Bharti Airtel on Tuesday posted a 49.2 per cent jump in its consolidated net profit to Rs 3,005.6 crore for the January-March quarter of 2022-23 on the back of new 4G customers and strong growth in average revenue per user (ARPU).

The company had recorded a net profit of Rs 2,007.8 crore in the same period a year ago.

Bharti Airtel's consolidated revenue from operations grew by 14.31 per cent to Rs 36,009 crore during the reported quarter from Rs 31,500.3 crore in the March 2022 quarter.

"This has been another strong quarter as we end the fiscal year having further strengthened our portfolio. Our focus on acquiring quality customers has resulted in 7.4 million new 4G customers, as we exit the quarter with an industry leading ARPU of Rs 193. A simple strategy and our relentless focus on execution have ensured that we close the year with market share gains across all businesses," Bharti Airtel Managing Director Gopal Vittal said in a statement.

Bharti Airtel India business during the reported quarter grew by about 12.2 per cent to Rs 25,250 crore and by 19 per cent in the 2022-23 fiscal to Rs 82,487.7 crore.

The company exited the fourth quarter and fiscal year with the highest industry average revenue per user (ARPU) of Rs 193 compared to Rs 178 that it recorded in March 2022 quarter.

Its rival and telecom major Reliance Jio has reported an APRU of Rs 178.8 during the March 2023 quarter.

Airtel India Mobile services revenue during the reported quarter grew 12 per cent to Rs 19,549.3 crore from Rs 17,526.2 crore in the March 2022 quarter.

The annual revenue of the mobile services business in India grew by 21 per cent to Rs 75,924.6 crore in FY2023 from Rs 62,915.1 crore in FY'22.

For the year ended on March 31, 2023, Bharti Airtel's net profit almost doubled to Rs 8,346 crore from Rs 4,255 crore a year ago.

The consolidated revenue from operations of Bharti Airtel for 2022-23 increased by 19.3 per cent to Rs 1,39,144.8 crore from Rs 1,16,546.9 crore at the end of 2021-22.

The company's capital expenditure in India more than doubled to Rs 8,989.4 crore in the March 2023 quarter from Rs 4276.7 crore a year ago.

The majority of the capex of Rs 6,647.1 crore was deployed in the mobile business as the company continues to build up a pan-India 5G network.

"We are also pleased to see the increased velocity of our digital deliveries across all parts of our business. This has been due to our sustained focus on digital platforms and talent. We continue to ramp up our 5G rollout and expect to connect all major towns and key villages by the end of this year," Vittal said.

Bharti Airtel said that it rolled out additional about 12500 towers in the quarter to further strengthen network coverage.

The company's total customer base increased to 51.84 crore in March 2023 quarter from 48.97 crore a year ago. Airtel's customer base in India grew 4.7 per cent to 37.53 crore during the reported quarter from 35.83 crore in March 2022 quarter. The company reported 11.6 per cent increase in 4G customer base to 22.41 crore from 20.84 crore in March 2022 quarter.

Airtel recorded an 8 per cent increase in data consumption per user to about 20 GB from 18.77 GB a year ago. However, data consumption per user declined marginally on a sequential basis.

The consolidated net debt of Bharti including the impact of leases stands at Rs 2,13,126.4 crore as of March 31, 2023.

Brokerage Outlook

Yes Securities value BHARTI on SOTP basis at Rs 905/sh, implying a target EV/EBITDA multiple of 7.1x FY24e, vs 5.8x as implied by CMP. Yes Securities believe that the industry wide revision of prepaid tariffs in 3QFY22 was a bold precursor to further revisions expected over coming quarters, as ARPUs in India continue to be amongst the lowest in the World.

Bharti believes that an ARPU of ~200-300 is required for adequate return on invested capital and therefore ARPUs need to improve going ahead.

In addition BHARTI is rapidly expanding and growing its asscociated business segemnts, which should incrementally aid earnings traction and debt reduction.

Yes Securities accordingly estimate an operating earnings CAGR (FY21-24e) of 22%, backed by continual subscriber gain and ARPU improvement. We remove net debt (including leases and accrued interest) for India business and USD1.5bn perpetual securities to arrive at our SoTP based target price of INR855 for Bharti.

The benchmark index for this stock is Nifty 50 Risks that may impede the achievement of the target price.

ESG and Sustainability

Telecom operator Bharti Airtel has taken to sharpen focus towards its environmental, sustainability, governance and challenges posed by climate change through sustainable business practices.

Airtel has already joined the science-based targets initiative’s (SBTi) 'Business Ambition for 1.5C' campaign and adopted targets to significantly lower its carbon footprint and emissions from its network

It added that it will achieve this through "multiple interventions including accelerated green energy adoption across its network operations, energy efficient infrastructure and processes as well as implementing sustainable business practices at its workplaces”.