Bharti Airtel Q3FY25 Results: Strong Profit Growth

Bharti Airtel has delivered another robust performance for Q3FY25, showcasing remarkable growth across its key business segments, including mobile, homes, and enterprise solutions. With a whopping 505% jump in net profit, a substantial increase in mobile revenue, and a strategic focus on premiumization, the telecom giant is firmly positioning itself for long-term success.

Let’s take a deeper dive into the major highlights of Airtel’s Q3FY25 performance, breaking down its revenue sources, customer metrics, and future outlook.

Record-Breaking Profit and Strong Revenue Growth

Airtel reported a net profit of Rs 14,781 crore, marking an astronomical 505% year-on-year growth from Rs 2,442 crore in Q3FY24. This exceptional performance was largely driven by a one-time gain of Rs 7,546 crore from the consolidation of a majority stake in Indus Towers, the telecom tower infrastructure company.

When we look at Airtel’s consolidated revenue, it reached Rs 45,129 crore, a 19% increase YoY, compared to Rs 37,900 crore in Q3FY24. Even though the consolidated revenue exceeded market expectations, it was noteworthy that Airtel’s India revenue (excluding Indus) grew at a healthy pace of 4.8% sequentially, showing that the company continues to thrive in its core Indian market.

Despite strong growth in profit and revenue, Airtel’s shares closed 2.32% lower on February 6 at Rs 1,622 apiece, hinting at some market correction after the results were released. But does this impact the long-term investment case for Airtel? Let’s analyze further.

Mobile Business: ARPU and Customer Growth Soar

The mobile segment continued to be the backbone of Airtel’s impressive performance, with mobile revenues increasing 21.4% YoY. The company’s strategic focus on premiumizing its customer base and driving tariff hikes has been pivotal in this success.

• ARPU (Average Revenue Per User): Airtel’s ARPU saw a remarkable growth of Rs 245, up from Rs 208 in Q3FY24. This increase reflects the impact of higher tariffs and a shift toward premium customers who are more likely to stay loyal and consume more data.
• Mobile Data Consumption: Airtel saw an exceptional 23.2% YoY increase in mobile data consumption. On average, each customer now consumes about 24.5 GB of data per month. This highlights the growing demand for data services and Airtel’s ability to meet this surge in consumption.
• Postpaid Customer Growth: Airtel also added 0.6 million postpaid customers during Q3FY25, expanding its base to 25.3 million. Postpaid customers tend to have higher ARPU, and their loyalty makes them a valuable segment for Airtel.
• Overall Customer Base: Airtel’s total customer base in India grew by 1.8% sequentially and 4.2% YoY, now standing at 414 million. This continued expansion in the customer base solidifies Airtel’s leadership position in the Indian telecom market.
• Smartphone Segment: Airtel’s market share in the smartphone segment saw a notable improvement, with 25.2 million new customers added, an impressive 10.3% YoY growth.

Homes Business: Growth on Track

Airtel’s homes business, which includes broadband and fixed-line services, also posted a strong performance, with revenue growing 18.7% YoY. The company is expanding its FWA (Fixed Wireless Access) offerings, which have been a key driver in accelerating growth in customer acquisitions.

• Customer Additions: Airtel added 674,000 new customers to its homes business in Q3FY25, bringing its total customer base to 9.2 million.
• Home Passes Expansion: Airtel continued its aggressive expansion, with over 1.8 million home passes added during the quarter. This increased network reach positions the company to attract more customers in urban and semi-urban areas, boosting the homes segment further.

Enterprise Business: Airtel Business

In the enterprise segment, Airtel Business delivered strong growth with a revenue increase of 8.7% YoY, despite challenges in the global market, particularly with pressures on wholesale data and messaging. The domestic business of Airtel Business, however, saw a healthy growth trajectory.

• Emerging Digital Services: Airtel’s emerging digital offerings, such as cloud and cybersecurity services, continued to gain strong traction, adding to the overall growth of the business.

Airtel Digital TV: A Slight Dip in Revenue

Airtel’s Digital TV segment saw a 2.9% YoY decline in revenue, totaling Rs 761 crore, as competition in the OTT and DTH (Direct-to-Home) space intensifies. The customer base stood at 15.8 million, with Airtel focusing on improving its content offerings to drive engagement and retention.

Airtel’s Strong Balance Sheet and Capital Allocation

Airtel’s balance sheet remains robust, supported by its strong cash generation and prudent capital allocation strategy. The company is also focusing on reducing its debt, with the prepayment of a Rs 3,626 crore tranche of high-cost spectrum dues during the quarter.

The company has been using its strong cash flows to de-leverage and ensure financial stability, which gives it flexibility for future investments.

Outlook: Sustained Growth on the Horizon

Looking ahead, Airtel’s leadership in the Indian telecom market, along with continued premiumization of its services, expansion in homes broadband, and robust performance from Airtel Business, provide a solid foundation for future growth.

The company’s ability to leverage its data infrastructure, expand its customer base, and generate strong cash flows positions it for sustained profitability. The recent consolidation of Indus Towers gives Airtel further operational advantages and strengthens its competitive edge in the telecom infrastructure domain.

However, as the telecom industry matures, tariff increases will be critical to sustaining this growth, as Airtel’s margins are closely tied to ARPU. Airtel is likely to continue pushing for higher tariffs across its mobile and broadband offerings while maintaining strong cost controls.

Conclusion: Is Bharti Airtel a Good Investment?

Airtel’s Q3FY25 results clearly indicate its strong financial health, operational excellence, and strategic growth in key sectors. While the telecom giant faces challenges such as competition in the DTH space and pressures on global enterprise business, its core mobile business and homes segment continue to drive growth.

For investors, Airtel remains a solid choice in the telecom sector, especially given its strong customer acquisition, premiumization strategy, and growing ARPU. The solid balance sheet and deleveraging efforts further enhance its investment case.

The company’s long-term strategy, however, depends heavily on industry-wide tariff hikes and the continued expansion of 5G and broadband services. If these efforts succeed, Airtel is well-positioned to continue delivering consistent and robust returns.

Investors who have already invested in Airtel should consider staying invested for the long-term, especially given its growth trajectory and market leadership. For new investors, Airtel presents an opportunity to tap into the ongoing growth of the telecom industry, particularly in India and Africa.

Disclaimer: This post is for informational purposes and does not constitute financial advice. Please consult with a financial advisor before making any investment decisions.