Airtel's Q3 revenue may rise 20% YoY; Vi could face 6 mn subscriber exits

Telecom major Bharti Airtel is likely to report up to 19.7 per cent year-on-year (YoY) growth in revenue to Rs 35,750 crore in the December quarter (Q3FY23), pegged analysts

Telecom major Bharti Airtel is likely to report up to 20 per cent year-on-year (YoY) growth in revenue to Rs 35,750 crore in the December quarter (Q3FY23), pegged analysts. Vodafone Idea, on other hand, is likely to clock up to 10 per cent YoY growth in revenues to Rs 10,702 crore in Q3FY23.

While Bharti Airtel is scheduled to announce results on Tuesday, February 7, Vodafone Idea is yet to announce dates.

So far in the October-December quarter of FY23, shares of Bharti Airtel have gained 0.8 per cent, whereas Vodafone Idea  declined marginally. In comparison, the S&P BSE Sensex climbed 5.9 per cent, during the same period.

Here's how analysts expect Q3FY23 numbers to play out for these companies

Bharti Airtel

According to brokerage estimates, the telecom major is likely to report up to 19.7 per cent YoY growth in revenue to Rs 35,750 crore in Q3FY23 from Rs 29,867 crore in Q3FY22. Sequentially, they expect up to 4 per cent revenue growth from Rs 34,527 crore in Q2FY23, with increase in India and South Africa wireless revenue.

While India's wireless revenues like broadband and enterprise are expected to remain robust, rising up to 2.1 per cent quarter-on-quarter (QoQ) to Rs 19,359 crore, the African business is likely to register 0.4 per cent QoQ revenue growth to Rs 10,485 crore, estimated analysts at ICICI Direct Research.

Despite higher operational expenditure on the back of 5G rollout, analysts said that the strong service mix, increase in average revenue per unit (ARPU), lower spectrum usage charge (SUC), will help expand EBITDA margins for India up to 70 bps QoQ to 52.5 per cent in Q3FY23 from 51 per cent in Q2FY23.

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Profit-after-tax (PAT), on the other hand, is estimated to grow up to 89 per cent YoY and 4.7 per cent QoQ to Rs 3,120 crore in Q3FY23.

Key monitorables: Commentary on the ARPU trajectory, non-wireless business outlook, progress on the 5G rollout, capex intensity, 4G subscriber addition, traction in home broadband, and other new initiatives.

Vodafone Idea

Brokerages expect the telecom operator to report up to 10 per cent YoY growth in revenues to Rs 10,702 crore in Q3FY23, however a muted sequential revenue growth is likely from Rs 9,717 in Q2FY23.

Analysts at ICICI Direct Research expect Vodafone Idea to build in monthly ARPU growth of 2 per cent QoQ at Rs 134, with overall churn to continue, with around 6 million customer exits likely in Q3FY23. Meanwhile, the company is expected to report a net loss of Rs 7,557 crore.

EBITDA margins, on the other hand, is expected to expand 190 bps QoQ, led by lower advertising spends, and revenue growth. Considering Vi's fragile balance sheet, analysts at Nuvama Equities estimate their ability to roll out 5G to be constrained.

Factors to watch out for: Vi's ability to update on fund raise, plan to increase network capacity, 5G launch plan, capex commentary, and ARPU trajectory.