Preview of the Telecom Q2: Bharti Airtel is expected to add 2 million total subscribers in the quarter ahead increasing the number to 329 million
Bharti Airtel and Vodafone Idea are slated to release their October quarter (Q2FY23) earnings on October 31 and November 3 respectively. In contrast, Airtel is expected to report small single-digit growth in its topline numbers on an annual basis, the earnings of Vodafone are expected to be flat.
This year the shares of Bharti Airtel have gained 19.4 percent, while the shares belonging to Vodafone Idea have dropped 44.4 percent. For comparison, the most-used benchmark S&P BSE Sensex has risen by 3 percent.
The telecom service company is expected to increase its total subscribers in the current quarter, bringing the total to 329 million. ARPU (average revenue per user) for instance is predicted to increase as high as 2.5 percent per quarter (QoQ) to around 188 rupees.
Revenue is projected to rise by 2 to 4.5 percent in a row between the range of Rs 33,421.7 crore and the figure of 34,285.3 crores. It could result in 21 percent YoY growth. Ebitda (earnings before depreciation, taxes, interest, and amortization) also could grow by 4.5 percent QoQ/25 percent YoY, to reach the amount of Rs 17,275 crore.
However, net profit projections vary between brokerages, with the smallest estimate of 2,134.8 million (up 33 percent QoQ) as well as the highest of 3,119.3 crores. 3,119.3 crore (94 percent QoQ). Net profit was 1,134 crore in Q1FY23 and 1,606.9 crores in Q2FY22. 1,606.9 crore in Q2FY22.
“Subscriber growth trend is expected to remain the same as the previous quarter, with an increase of 2 million. The number of data subscribers is expected to reach 4.5 million. APRU is predicted to increase by 1 percent QoQ. This means that India’s mobile segment will be predicted to increase by 1 cent per quarter. On the other hand, it is expected that the Homes and Enterprise segments are likely to experience an increase of steady 5 percent or 3 percent respectively. Meanwhile, DTH will decrease by an additional 0.4 percent QoQ.” the analysts from Emkay Global.
Brokerages are split on the financial performance of the company for the third quarter, as they are expecting to see a slight or flat decline in earnings. However, Emkay Global expects the revenue of Vodafone Idea to decrease by 0.4 percent QoQ however, it is expected to grow by 10 percent YoY to 10,372.8 crores. JM Financial expects a 1.5 percent QoQ/12.4 percent YoY growth in revenue to 10,571.4 crores. The revenue was 9,406.4 crore in FY19, and 10,410 crores in Q1FY23.
The Ebitda projections also vary across a wide range of 4,271.5 million (down 1.3 percent QoQ/up 10.6 percent YoY) to 4770 crores (up 10.2 percent QoQ/23.5 percent YoY). A net loss can be estimated to be between Rs 6,005 and the figure of 7,460.6 crores. The loss was 7,132.3 million in Q2 FY22 and 7,297.1 crores in Q1FY23. 7,297.1 crore in Q1FY23.
A positive note to end the year, JM Financial said Vi could lose 2.6 million subscribers overall for The second quarter in Q2FY23 (vs 3.4 million loss of subscribers during Q1FY23). However, it is expected that 1.5 million new subscribers will be available to support MBB mobile (MBB) customers. Thus, revenue is projected to rise by 1.5 percent QoQ, with ARPU increasing to 130 (from 128 during Q1FY23).
On the other hand, Emkay Global said that Vodafone Idea’s ARPU growth could reach 1 percent QoQ with a drop in subscribers of 4 million during the quarter. In this regard, data subscribers are expected to rise by 1.4 million in a single period.
“Overall growth in revenue is expected to decrease by 0.4 percent in the quarter. The margins are also expected to decrease by 40bps per quarter. VIL must raise funds as soon as possible to build its network and limit the further decline of subscribers. Fund-raising is essential in order to ensure that it is not left back in the race to 5G which has peers already ahead,” it said.