In the third quarter of financial year 2025, Bharti Airtel, the second-largest telecom provider in India, showed strong financial performance, surpassing market forecasts. Brokerage companies are feeling more optimistic as a result of the company's notable increase in net profit, which was fuelled by the consolidation of Indus Towers and good success in the Indian cellular market.
Investor confidence in the company's development trajectory is reflected in the spike in Bharti Airtel's share price caused by this performance. The company's ability to grow its subscriber base and raise its average revenue per user suggests that it has a solid position in the cutthroat telecom industry.
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Bharti Airtel's Q3FY25 Financial Performance
Bharti Airtel's consolidated net profit grew a whopping 505% to ₹14,781 crore in Q3FY25, as against ₹2,442 crore in the same quarter last year. A one-time exceptional gain from the consolidation of Indus Towers was the main reason for this significant growth. The firm's revenue also grew substantially, rising 19% year-on-year to ₹45,129.3 crore in Q3FY25, as against ₹37,899.5 crore in Q3FY24.
The consolidation of Indus Towers had a beneficial impact on the company's Q3 performance, boosting its profits by ₹14,322.5 crore. However, regulatory charges of ₹6,358.6 crore and impairment charges of ₹1,740.4 crore on intangible assets offset this to some extent.
Major Growth Drivers
Mobile ARPU Growth: An increase in mobile average revenue per user, which rose from ₹208 in Q3FY24 to ₹245 in Q3FY25, was a key highlight. This growth was driven by a 23.2% year-on-year growth in mobile data usage, with average monthly consumption per user at 24.5 GB.
Subscriber Additions: With 6.5 million new 4G and 5G users, Bharti Airtel has proven that it can attract and retain consumers in a tough industry. Additionally, with a net addition of 0.6 million in Q3FY25, the business grew its customer base to 25.3 million, solidifying its leading position in the postpaid market.
Home Broadband Growth: With a 19% year-on-year growth in sales, Bharti Airtel's residential business continued to expand. Led by FTTH and FWA5, net customer addition reached an all-time high of 674,000.
Business Segment Growth: Revenue from Airtel business also saw a significant increase, growing 8.7% year-on-year.
Brokerage Ratings and Targets
Post the release of Q3 FY25 results, several brokerage firms have provided their analysis and ratings for the Bharti Airtel stock.
JM Financial: Maintained a 'Buy' rating with a target price of ₹1,850, citing the company's better-than-expected third quarter performance and potential benefits from price hikes in India's cellular industry.
HSBC: Remained optimistic with a target price of ₹1,940, stating that the home broadband and mobile segments were the key drivers of third quarter growth. Due to its improved capital turnover and margin expansion, it feels Bharti Airtel is well positioned to increase its returns on invested capital.
CLSA: Retained its 'Outperform' rating, reflecting Airtel's impressive performance in the Indian mobile market with 21%-30% year-on-year growth in sales and EBITDA.
UBS: Set a target of ₹1,705, maintained a 'Neutral' grade, believing that results were mostly in line with expectations.
Morgan Stanley: With a target price of ₹1,650, it maintained an 'equal weight' rating, reflecting strong free cash flow generation and consistent subscriber growth.
Market Reaction
Bharti Airtel share price rose as a result of the company's impressive Q3FY25 earnings and favorable brokerage ratings. The stock gained 5.46% on February 7, 2025, hitting an intraday high of ₹1,708 per share. At 10:43 am, the BSE Sensex was trading flat, but Bharti Airtel share price rose 4.79% to ₹1,697.05 per share.
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