Bharti Airtel shares fall after the second quarter’s miss. Should you sell, buy or hold?

Date : 01/11/2022
Read: 3 mins

Trading in Bharti Airtel shares after they slipped post its quarterly results.

It's time for companies to post their quarterly results for the second quarter (July-September) of the financial year 2022-23, and Bharti Airtel was the latest company to do so. While the company posted impressive growth in its consolidated net profit after the second quarter that ended in September 2022, it missed industry estimates. The result – the company’s shares slipped on the BSE and fell by 1% in the early trading session on Tuesday, 1st November 2022. Currently, the shares were reported to be trading at Rs.823 on the BSE after the declaration of the results.

The quarterly results of Bharti Airtel

As per the published results, here is what Bharti Airtel reported after the end of its second quarter –

89% jump in the consolidated net profit on a YoY (Year-on-Year) basis, which stood at Rs.2145 crores. However, as the company missed the estimates, it called on for tariff increases across the telecom industry.
Revenue saw a boost from new 4G customer additions jumping by more than 22% YoY. The revenue was reported to be Rs.34,526 crores.
Sequential revenue also increased by 5.2%
The EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is estimated to grow at a CAGR of 20% between FY 2023 and 2025.
The ARPU (Average Revenue Per User) was reported at Rs.190 for the second quarter. It is more than Reliance Jio’s figures and the industry estimates.
The company aims to grow at a rate of 17% over the next two financial years.
Data traffic grew 7.4% QoQ (Quarter-on-Quarter) with an average usage of 21GB per user.

What should investors do?

If you are worried about the slip in the share prices of Bharti Airtel posts its quarterly results, you can relax. The slip is short-term as the market reacts to the company’s performance. Many experts are of the opinion that the company is poised for growth. Here are some reasons why –

Tariff hikes might happen in the last quarter of the financial year. This would be a good move for the company as it hopes to boost its revenue and net profits with increased tariffs.
The growth outlook of the company is positive and strong.
Airtel was the first in the industry to offer 5G services for its customers. While the company started the service from eight cities only, it intends to extend the service pan-India, even in rural areas, by March 2024. With the increasing 5G rollout, revenue and profits are expected to increase.
High ARPU and an increase in mobile data consumption are expected to boost revenues in the coming years.

With a positive outlook, the company’s stock is expected to perform well in the future. So, as an investor, you can hold onto the stock for better returns.

What the industry expected from Bharti Airtel's results

Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.

The quarterly results of Bharti Airtel

As per the published results, here is what Bharti Airtel reported after the end of its second quarter –

89% jump in the consolidated net profit on a YoY (Year-on-Year) basis, which stood at Rs.2145 crores. However, as the company missed the estimates, it called on for tariff increases across the telecom industry.
Revenue saw a boost from new 4G customer additions jumping by more than 22% YoY. The revenue was reported to be Rs.34,526 crores.
Sequential revenue also increased by 5.2%
The EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is estimated to grow at a CAGR of 20% between FY 2023 and 2025.
The ARPU (Average Revenue Per User) was reported at Rs.190 for the second quarter. It is more than Reliance Jio’s figures and the industry estimates.
The company aims to grow at a rate of 17% over the next two financial years.
Data traffic grew 7.4% QoQ (Quarter-on-Quarter) with an average usage of 21GB per user.

What should investors do?

Tariff hikes might happen in the last quarter of the financial year. This would be a good move for the company as it hopes to boost its revenue and net profits with increased tariffs.
The growth outlook of the company is positive and strong.
Airtel was the first in the industry to offer 5G services for its customers. While the company started the service from eight cities only, it intends to extend the service pan-India, even in rural areas, by March 2024. With the increasing 5G rollout, revenue and profits are expected to increase.
High ARPU and an increase in mobile data consumption are expected to boost revenues in the coming years.

With a positive outlook, the company’s stock is expected to perform well in the future. So, as an investor, you can hold onto the stock for better returns.