InvestorQ : What does the big loss posted by Bharti Airtel in the June quarter mean for the stock price of Bharti Airtel?
Katherine Gonsalves made post

What does the big loss posted by Bharti Airtel in the June quarter mean for the stock price of Bharti Airtel?

Answer
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Rutuja Nigam answered.
1 year ago


Bharti Airtel reported a consolidated net loss of Rs.2866 crore for the June quarter even as margins were marginally up at Rs.20,738 crore in the June quarter. Despite the huge net losses, there were some positives for the stock on the operating margin front. For example, the EBITDA margin was up by 25% at Rs.8492 crore. What is more interesting is that the EBITDA margins of the company actually improved from 33% to 41%. Compare to the March quarter, the Average Revenue per User (ARPU) also grew by 5% to Rs.129. In fact, the ARPU had dipped well below Rs.100 two quarters back but then later the company started weeding out low value customers to improve its ARPU and that has helped.

The stock has been quite volatile in the last few days but it should benefit from the deep financial troubles that Vodafone Idea is in. Vodafone has already reported a net loss of nearly Rs.20,000 crore in the last four quarters and Airtel and Jio have been benefiting from customers migrating out of Vodafone. Considering its global footprint of 40 crore customers, Bharti Airtel could be a good buy at this price. It is actually the improved operating margins and higher ARPUs that have been pushing the price higher.