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Bharti Airtel Ltd Q4 FY21 Concall Highlights | Yadnya Investment Academy

Bharti Airtel Ltd Q4 FY21 Concall Highlights | Yadnya Investment Academy

Published on 08 June 2021|
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Management:

Mr. Gopal Vittal

Managing Director & Chief Executive Officer, India & South Asia, Bharti Airtel Limited

Mr. Badal Bagri

Chief Financial Officer – India & South Asia- Bharti Airtel Limited

Mr. Harjeet Kohli

Group Director, Strategy & Business Development

Ms. Komal Sharan

Head - Investor Relations

 

Q4 performance:

  • Revenue from Operations of Airtel has gone up by 12% YoY from Rs. 23,019 Cr. in Q4FY20 to Rs. 25,747 Cr. in Q4FY21. Sequentially, revenue has gone down by 3% from Rs. 26,518 Cr. in Q3FY21.
  • Consolidated EBITDA margins for the quarter were at 48.9 percent compared to the preceding quarter of 45.9 per cent. The EBITDA margin of Airtel stood at 48.9% in Q4FY21, up by 6.5% YoY from 42.4% in Q4FY20. Quarter-on-Quarter, EBITDA Margin was up by 3% from 45.9% in Q3FY21.
  • As per Frost and Sullivan, revenue market share grew from 23% in December 2018 to at 31% share in December 2020. The company has closed the year with an annual revenue run rate of $2 billion.
  • Further, the EBIT (Earnings Before Interest & Tax) of the company has gone up by a massive 75.5% YoY to Rs. 5,048 Cr. in Q4FY21 from Rs. 2,876 Cr. in Q4FY20. Sequentially, growth in EBIT is 8% from Rs. 4,665 Cr. in Q3FY21.
  • Despite a great jump in EBIT, the EBIT Margin of Airtel is at 19.6% in Q4FY21 up by 7.1% YoY from 12.5% in Q4FY20. Other Costs like AGR Dues, etc. have greatly affected the EBIT Margins of the company.
  • Moving ahead to the Finance Cost of the company, Bharti Airtel has a higher Finance Cost than its closest peer i.e., of 3,861 Cr. as of March 2021. Here, the positive thing for the company is the reduction in the Finance Cost of 7% YoY and 3% QoQ from Rs. 4,147 Cr. in Q4FY20 and Rs. 3,972 Cr. in Q3FY21.
  • In terms of Profit Before Tax (PBT), Airtel is finally able to go on the profitability side on a year-on-year basis. Loss of the company on Q4FY20 was Rs. 469 Cr., which now stands at Rs. 1,581 in the quarter ended 31st March 2021. Sequentially, it has grown by a significant 167% from Rs. 592 Cr.
  • Net Profit (After Exceptional Items) for the Q4FY21 was Rs. 759 Cr. for the company. Previous year in the same quarter, there was a loss of Rs. 5,237 Cr. While QoQ has come down by 11% from Rs. 854 Cr. in Q3FY21.

 

To tap into new opportunities, the company is re-tooling its channels as well as its product portfolio. The company is doing following four things.

  • In sourcing its entire SME sales force, which was earlier outsourced. This will lead to upgradation of its SME channel capabilities helping in gain share.
  • They are building their omni-channel digital capabilities. Today, more than 95% of the new orders for the product lines where they have begun this effort are coming through digital channels. This will also help them expand reach and gain share.
  • They have entered adjacent areas so they can go deeper with their customers to farm more effectively. These new areas include Data Centres, Airtel secure, Airtel IQ and Airtel Cloud. All of these are building traction and are helping them grow share of wallet. This quarter, the company has launched Airtel IoT. Airtel IoT is an integrated and end-to-end platform with the capability to connect and manage billions of devices and applications in a highly secure and seamless fashion on Airtel’s 5G ready network.
  • Finally, their teams have now been given differential and separate targets and incentives for both hunting and farming. This will also allow them to meet their twin objectives of growth in share and growth in share of wallet.

 

Homes business:

  • The Broadband business has grown to 3mn+ customers on the back of strong demand for home broadband. During the quarter, the company has added 1mn+ new connections. The company is now present in 200+ cities.
  • In DTH business, the company is at 2nd position in the market. From a revenue market share of about 22 percent in December 2018 they are now at 27 percent share in December 2020. With full ownership of the DTH entity, they have even more flexibility to drive this business.

 

Mobile business:

  • During the quarter, the company has acquired precious spectrum. they now have a pan-India footprint of Sub Ghz spectrum. They have also strengthened their mid-band spectrum bands.
  • Over the last year they have added 43 million 4G customers to the network and 1.9 million net adds to the post-paid segment.
  • The company has reached milestone at 200 million MAU. Wynk has 72.5 million. Airtel Xstream has 37.5 million. And Airtel Thanks has 96.3 million.
  • Airtel Payments bank is now rapidly gaining scale. They already have 54 million active users and a monthly throughput of around 22000 crores. The company’s distribution footprint is across 290000 outlets.
  • This quarter, the company has launched Airtel Ads. Airtel Ads is a brand engagement solution that allows brands of all sizes to curate consent based and privacy safe campaigns to one of the biggest pools of quality customers in India. This is a massive and growing market. In the Beta phase itself they have worked with over 100 brands and are beginning to clock meaningful revenues.

 

Balance sheet highlights:

  • The Debt of the company has increased by 19% YoY from Rs. 1,24,521 Cr. in the quarter ended 31st March 2020 to Rs. 1,48,507 Cr. in the quarter ended 31st March 2021.
  • DOT and AGR debt itself account for ~56 per cent. In addition, accounting leases contribute to ~19 per cent of the debt.
  • Sequentially, the Debt of Airtel has gone by 0.7% from Rs. 1,47,440 Cr. in December Quarter of FY21.
  • Also, Airtel has recognized the AGR-related Liability on its Balance Sheet of Rs. 24,840 Cr. and Rs. 23,861 Cr. in Q3FY21 and Q4FY21 respectively.

 

The company has successfully monetised some of its assets including Airtel Money & Tower assets in Africa. In addition, they have also monetised the unutilised 800 MHz spectrum in 3 circles in India by entering a trading arrangement with Reliance Jio.

 

ESG initiatives:

  • The company is aligned with the Paris Climate Accord. They have implemented clean fuel-based power solutions for their towers, data centres, switching centres and other facilities.
  • It has commissioned a 14 MW captive solar power plant shortly after the quarter ended to meet the energy requirements of their core and edge data centres in Uttar Pradesh. Another similar plant is expected to be commissioned in the coming months.
  • The company is aiming to meet more than half of its FY22 power input through renewable energy sources.
  • Over the last few years, the company has reduced its carbon emission per Terra byte by 78% against a self-imposed target of 80%.

 

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