Bharti Airtel Q3 Results Review - Steady Operating Performance: Prabhudas Lilladher

Prabhudas Lilladher Report

Bharti Airtel Ltd.'s reported Ebitda/profit after tax of Rs 198.1 billion (plus 1.5%QoQ; our estimate Rs 198.9 billion) and Rs 24.4 billion (plus 82%QoQ; our estimate Rs 15.4 billion). India mobile revenues were up 3.3%QoQ and Ebidta margin was stable at 55.1%. Average revenue per user grew 2.5% QoQ to Rs 208 (our estimate Rs 205) with 7.4 million growth in 4G subscribers (overall net addition was 3.3 million).

Africa mobile Revenue/Ebitda remained flat QoQ, while Enterprise revenue grew 1.7% QoQ, while there was a muted growth in Ebitda with a 57 basis points fall in margins. Home services (fixed line plus broadband) had an ARPU decline of 2% while direct-to-home ARPU grew 2.5%.

We maintain our positive stance on the sector, due to falling competitive intensity, given weak financial position of peers.

Maintain ‘Accumulate’ rating at SOTP based target price of Rs 1225 based on 11 times FY26 enterprise value/Ebitda for India mobile multiple, six times FY26 enterprise value/Ebitda for Airtel Africa, enterprise segment at nine times FY26 enterprise value/Ebitda, three times FY26 enterprise value/Ebitda for DTH and 6 times enterprise value/Ebitda for home services.

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