Bharti Airtel's Stellar Q2 Results Blow Past Expectations: Analysts Hike Target to ₹2,259 on Strong Growth!

Bharti Airtel has reported exceptional second-quarter results, significantly surpassing analyst expectations. Consolidated EBITDA grew by a robust 35.3% year-over-year and 6.2% quarter-over-quarter to Rs295 billion, exceeding both Prabhudas Lilladher's (PLe) and Bloomberg's consensus estimates. Adjusted Profit After Tax (PAT) also saw a substantial rise of 52.7% YoY and 14.2% QoQ to Rs67.9 billion, beating PLe and Bloomberg estimates.

The growth was primarily driven by strong performance in its India and Africa operations. India revenue increased by 10.6% YoY and 2.9% QoQ, fueled by consistent momentum in Mobile and Home Services. India Mobile revenue reached Rs281.1 billion, with a healthy EBITDA margin of 60.3%, supported by improved realisations and a growing customer base. The Average Revenue Per User (ARPU) for India Mobile climbed to Rs256, marking a 9.8% YoY and 2.3% QoQ increase, with 1.4 million net subscriber additions. Home Services revenue demonstrated impressive growth, up 30.2% YoY and 8.5% QoQ. However, Digital services revenue saw a slight decline YoY, and Enterprise services revenue, while declining YoY, showed a QoQ improvement.

Outlook Prabhudas Lilladher remains optimistic about Bharti Airtel's India business, anticipating further growth in ARPU and net subscriber base. The brokerage maintains an 'Accumulate' rating and has raised its price target to Rs2,259 from Rs2,090. This new target is based on a 14x FY27/FY28E EV/EBITDA multiple for the India business, plus the valuation of its investments in Airtel Africa, Indus Towers, and Bharti Hexacom.

Impact This news is highly positive for Bharti Airtel and its investors. The strong financial performance and raised price target indicate robust operational execution and positive future prospects. It is likely to lead to increased investor confidence and potentially a rise in the stock price. The performance also reflects positively on the overall health of the Indian telecom sector. Rating: 8/10

Terms Explained: EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. This metric indicates a company's operating profitability before accounting for interest, taxes, and non-cash expenses. Adj PAT: Adjusted Profit After Tax. This is the net profit remaining after deducting all taxes and expenses, with certain extraordinary or non-recurring items adjusted out to reflect ongoing operational profitability. YoY: Year-over-Year. A comparison of a financial metric against the same period in the previous year. QoQ: Quarter-over-Quarter. A comparison of a financial metric against the immediately preceding quarter. ARPU: Average Revenue Per User. It represents the average revenue a telecom company generates from each of its subscribers over a given period. EV/EBITDA: Enterprise Value to EBITDA. A valuation ratio used to determine the value of a company by comparing its enterprise value to its EBITDA. It is often used to compare companies within the same industry.