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Bharti Airtel Limited — Q2 FY25
Bharti Airtel delivered a solid Q2 FY25 with consolidated revenue of INR 41,400 crore and India EBITDA margins expanding 110 bps to 54.8%.
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Bharti Airtel delivered a solid Q2 FY25 with consolidated revenue of INR 41,400 crore and India EBITDA margins expanding 110 bps to 54.8%. The tariff repair flow-through is on track, with ARPU rising to INR 223 (from INR 211 QoQ) and minimal SIM consolidation or downtrading. Broadband added ~600k customers, driven by FWA expansion now live in 2,000+ cities. The company generated record operating free cash flow of INR 11,000 crore (EBITDA minus CapEx), with CapEx moderating to INR 6,250 crore. Management reiterated the need for further tariff repair given sub-7% industry ROCE, and guided for lower full-year CapEx. Key risks include potential AGR liability from the rejected curative petition and slower-than-expected B2B order conversion.
भारती एयरटेल की दूसरी तिमाही (Q2 FY25) में कमाई 41,400 करोड़ रुपये रही। भारत में कमाई पर खर्च घटाकर मुनाफा बढ़ाने की दर (EBITDA मार्जिन) 54.8% हो गई, जो पिछली तिमाही से 1.1% ज्यादा है। कंपनी ने टैरिफ (कीमतें) बढ़ाईं, जिससे हर ग्राहक से औसत कमाई (ARPU) 211 से बढ़कर 223 रुपये हो गई। ग्राहकों की संख्या में कोई बड़ी गिरावट नहीं आई। ब्रॉडबैंड में 6 लाख नए ग्राहक जुड़े, खासकर फिक्स्ड वायरलेस एक्सेस (FWA) सेवा से, जो अब 2,000 से ज्यादा शहरों में है। कंपनी ने 11,000 करोड़ रुपये का रिकॉर्ड फ्री कैश फ्लो (खर्च निकालने के बाद बचा पैसा) बनाया। पूंजी खर्च (CapEx) घटाकर 6,250 करोड़ रुपये किया गया। प्रबंधन ने कहा कि उद्योग में निवेश पर वापसी (ROCE) 7% से कम है, इसलिए टैरिफ और बढ़ाने की जरूरत है। जोखिम: एजीआर (स्पेक्ट्रम फीस) का कर्ज और बिजनेस ग्राहकों से धीमी कमाई।
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AGR liability from rejected curative petition
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Read Transcript →Quarter Snapshot
ARPU
INR 223
+INR 12 QoQ
Industry-leading ARPU growth driven by tariff repair and data monetization.
5G User Base
105 million
+15 million QoQ
5G user base continues to expand; 5G shipments growing and Airtel gaining share.
Broadband Net Adds
600,000
Step jump from previous quarters
FWA expansion driving strong broadband customer additions.
India Net Debt to EBITDA
2.6x
-0.5x YoY
Improved from 3.1x a year ago, aided by prepayment of high-cost spectrum dues.
What Changed vs Last Quarter
NEW
Full-year CapEx to moderate from last year's elevated level
CapEx will be lower than FY24, which was a peak year due to 5G and site rollout. Q2 CapEx was INR 6,250 crore, and the trend is expected to continue.
NEW
FWA on standalone 5G by December 2024
Trials for standalone 5G on FWA are underway, and commercial deployment is planned by December 2024 to improve uplink performance.
NEW
Rural site rollout largely complete this year
The project to add 25,000 rural sites will be mostly completed by the end of the fiscal year, with only a few circles remaining.
UPDATED
Full benefit of tariff repair to accrue over next two quarters
Management expects the full impact of the recent tariff increase to be reflected in the coming quarters, with normalization of customer trends already seen in October.
DROPPED
Industry needs minimum ARPU of INR 300
Management reiterated that the industry requires ARPU of at least INR 300 for sustainable investment and respectable returns.
DROPPED
FWA launch on SA technology by Q2 FY25
Fixed wireless access will be launched on standalone 5G architecture nationally by August/September 2024.
DROPPED
Capex moderation in FY25
Full-year capex will be lower than FY24, with India mobile capex expected to moderate.
NEW RISK
AGR liability from rejected curative petition
The Supreme Court rejected the curative petition on AGR dues. A review petition is pending, but the moratorium period is yet to start, creating uncertainty.
NEW RISK
B2B global business order conversion delay
While customer discussions have improved, they have not yet translated into firm orders, posing a risk to B2B revenue growth.
NEW RISK
DTH customer losses due to seasonality
DTH lost over 500,000 customers in the quarter, attributed to pronounced seasonality, which could persist if competitive pressures intensify.
RISK GONE
Enterprise segment slowdown
B2B revenue growth softened to 1% sequentially, impacted by global OTT spend deferrals and domestic rationalization.
RISK GONE
Tariff hike impact on low-end subscribers
Early signs show modest SIM consolidation among 2G users post tariff hike; full impact on churn and downgrades remains uncertain.
RISK GONE
5G monetization challenges
Globally, 5G lacks major use cases beyond FWA; monetization relies on tariff upgrades, which may face customer resistance.
RISK GONE
Competitive intensity in B2B
Reverse auctions for government tenders and PSU contracts continue to exert pricing pressure, though management views it as business as usual.
🤫 Topics management stopped discussing
Mentioned in Q1 FY25, Q2 FY24, Q3 FY24, Q4 FY24
Full-year capex will be lower than FY24, with India mobile capex expected to moderate.
Mentioned in Q2 FY24, Q4 FY24
Free 5G data weighs on ARPU; management sees no near-term monetization and expects only gradual improvement via tariff repair.
Mentioned in Q1 FY25, Q4 FY24
Reverse auctions for government tenders and PSU contracts continue to exert pricing pressure, though management views it as business as usual.
Mentioned in Q1 FY25, Q4 FY24
Fixed wireless access will be launched on standalone 5G architecture nationally by August/September 2024.
Fast read
Guidance and risk preview
Management expects the full impact of the recent tariff increase to be reflected in the coming quarters, with normalization of customer trends alre...
The Supreme Court rejected the curative petition on AGR dues.
View Risks →