Bharti Airtel, country’s largest telecom firm, will announce its financial results for the quarter ending December 2015 on January 28, 2016. Here are 7 things to look out for in Q3 FY16 results.
Revenue growth: According to IIFL estimates, the company is expected to report net revenue of Rs. 24,424 crore, a 5.1% growth on Y-o-Y basis. While, on Q-o-Q basis, the telecom firm’s net revenue growth is expected to grow at 2.4 % driven by seasonality tailwind in domestic business and Airtel Africa US$ growth.
The company’s net profit for Q3FY16 is likely be around Rs. 1133.5 crore, declining by 21.1 % on Y-o-Y basis and 25.6 % on Q-o-Q basis. The EBIDTA margin is expected to be at 34.3%.
Voice pricing: IIFL estimates 1.4% traffic growth though voice pricing would remain under pressure for India business.
Impact of Africa tower sales: Gopal Vittal, CEO of Airtel’s India & South Asia unit, while announcing Q2 results had said, "Performance in Africa is showing slight revenue increase. We expect margins to remain in the 40% range going forward."
IIFL estimates Africa margins to climb 20.8% while consolidated PAT would decline on sequential basis due to Rs. 660 crore one offs gain in Q2 mainly related to sale of tower assets in Africa.
Acquisition of Augere Wireless: Airtel acquired Augere Wireless in Madhya Pradesh closing the deal in two parts. With the acquisition, Augere has become a wholly owned subsidiary of Airtel. The company, however, did not disclose the financial details of the deal. However, reports estimate the deal to be around Rs. 150 crore.
Project Leap: On November 30, 2015, Bharti Airtel had announced a Rs. 60,000 crore investment towards its comprehensive network transformation program – “Project Leap”. Under its ambitious “Project Leap”, Airtel plans to add around 1,60,000 sites in the next three years, while it is currently working on installation of nearly 23,000 data sites.
Chennai floods: The top telco offered an automated talk time credit up to Rs. 30 for its prepaid customers affected by Chennai floods. Moreover, it offered a 10 minutes credit for Airtel to Airtel calling free of cost along with a free credit of 50MB data. However, due to incessant rains, the services of all the telecom operators were disrupted for almost a week and telcos said to have suffered considerable losses due to failure of services in flood-affected areas of Chennai.
4G networks and data prices: Given focus on accelerated roll outs of 3G/4G networks, India wireless margin is expected to remain flat despite a +1.5% Q-o-Q revenue tailwind.
Bharti Airtel has been rolling out data benefits for mobile customers, ranging from Data Cashback, Family Data Share to other Smartphone Surprises to sustain the growing competition and pricing pressure, which is likely to impact Q3 numbers.
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