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Bharti Airtel Ltd Q3 FY24 Earnings Conference Call Insights

Key highlights from Bharti Airtel Ltd (BHARTIARTL) Q3 FY24 Earnings Concall

  • Financial Performance
    • Revenue impacted by currency devaluations in Africa.
    • India revenue grew steadily at 3% sequentially to over INR 27,800 crores.
    • EBITDA margin remained healthy at 53.9%.
    • Generated operating cash flows of INR 7,250 crores in India.
  • Segment Performance
    • Strong mobile subscriber additions of 7.4 million 4G customers.
    • ARPU increased by INR 5 to INR 208 on upgrades and share of wallet.
    • Moderation in home broadband net adds due to discontinued entry level plans.
    • DTH saw highest net adds in 12 quarters at 388,000.
  • Strategy Update
    • Portfolio diversification with 27% Africa, 57% India mobility revenue.
    • Consistent customer wins through focus on high value B2C and B2B users.
    • Leveraging digital capabilities for sales, marketing and understanding customers.
    • Investments in fiber, systems integration and emerging segments.
    • Massive rollout of 30,000 sites performed well on key metrics.
    • Gaps remain in 5 key circles representing 18% subscriber share.
    • Will increase coverage in these circles to build customer tailwind.
  • Digital Capability Monetization
    • Can extend digital experience platforms to other telcos globally.
    • Portfolio of digital services like Airtel IQ and Airtel Finance.
    • Capturing IoT opportunity across connectivity, cloud, analytics.
  • Capital Allocation
    • Delivered consistent quarter with strong cash generation.
    • Prudent capital allocation improving ROCE without tariff hikes.
    • Investing to build future-ready capabilities across focus areas.
    • Strong cash conversion driven by operating leverage improvements.
    • Priority use of cash flow remains debt reduction for now.
  • Capex and Cash Flow Outlook
    • Elevated capex of INR25,000 crores in FY2025 with 5G and rural rollout.
    • Expects capex to moderate in FY2026.
    • Long-term target is 15-20% capex to revenue ratio.
    • Continued deleveraging expected with operating leverage benefits.
    • Headroom for growth in broadband, B2B and mobility.
    • Margin expansion to drive improved net debt to EBITDA over time.
    • First priority is debt reduction for both India and Africa.
    • Targeting sub-2x net debt/EBITDA for India.
  • Network Expansion Plans
    • Currently over 300,000 sites nationwide.
    • Looking to add 25,000 more sites in 5 key underpenetrated circles.
    • Expects to bridge gap prudently based on cluster level profitability.
  • 2G/5G Network Outlook
    • 2G now contributes 17% of overall business revenue.
    • Contribution higher in rural states but reducing steadily.
    • Expects substantial disappearance of 2G over next few years.
    • Currently 65 million 5G subscribers, about 15-16% of total.
    • Expect 25% 5G share of smartphones by March 2025.
    • 60-80% of new devices shipping are 5G capable.
  • 5G Migration Approach
    • To shift progressively from NSA to SA architecture over time.
    • As more traffic shifts to 5G, will refarm 4G spectrum to 5G.
    • Following customer traffic patterns to drive migration path.
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