Bharti Airtel shares shed 2% on Monday, November 9, as traders penalized the telecom giant for retreating on tariff discipline. The company quietly brought back its ₹299 prepaid recharge pack—withdrawing an August price hike after rival carriers refused to match it. The market gave the climbdown a cold reception. Pricing power fractured.
Citi brokerage maintained its 'Buy' rating on Bharti Airtel, pushing its price target up to ₹2,390 from ₹2,230—signaling a 15% upside from previous closing levels. But the brokerage laid bare the structural trap in its client note. Reinstating the ₹299 plan, Citi noted, underscores the sheer difficulty of maintaining higher price points in a cutthroat market when competitors refuse to follow suit.
The cost of going solo on tariffs hit the carrier straight in the order book. Net subscriber additions collapsed to just 7.16 lakh in the September quarter, down sharply from 32.65 lakh in the preceding three-month period. Monthly subscriber churn crept up by 30 basis points to 2.9%. The numbers proved what desk traders suspected: users were jumping ship for cheaper rival networks rather than absorbing higher entry tariffs.
Yet the underlying balance sheet showed strength, driven largely by high-value contract customers. Consolidated revenue climbed 4% sequentially to ₹60,877.5 crore in Q2, beating street estimates of a 2.5% increase. Profit before exceptional items rose 11.9% quarter-on-quarter to ₹9,015.1 crore. Consolidated net profit, factoring in a ₹180 crore expense tied to the Airtel Money initial public offering, grew 8.8% to ₹8,887.5 crore.
| Financial Metric | Q2 (Current Quarter) | Q1 (Previous Quarter) | QoQ Change |
|---|---|---|---|
| Consolidated Revenue | ₹60,877.5 crore | ₹58,539.1 crore | +4.0% |
| Consolidated EBITDA Margin | 57.4% | 56.9% | +50 bps |
| Pre-Tax Profit (Pre-Exceptional) | ₹9,015.1 crore | ₹8,057.2 crore | +11.9% |
| Net Profit (Post-Exceptional) | ₹8,887.5 crore | ₹8,167.4 crore | +8.8% |
| Average Revenue Per User (ARPU) | ₹271 | ₹264 |
Inside the domestic engine room, India mobile revenue advanced 3.4% sequentially to ₹30,943.1 crore, while mobile earnings before interest, taxes, depreciation, and amortization reached ₹18,873.5 crore at a 61% margin. Mobile earnings before interest and taxes jumped 7.4% to ₹10,675.6 crore. Average revenue per user—the lifeblood metric of the telecom sector—edged up 2.7% to ₹271 from ₹264. High-tier mobile users spent more, but the bleeding at the bottom forced management's hand on the ₹299 tier.
Bharti Airtel now faces an entrenched battle for volume. Without coordinated industry-wide price hikes from rival operators, the carrier must balance its premiumisation drive against the risk of bleeding lower-tier market share.
| +2.7% |
| Net Subscriber Additions | 7.16 lakh | 32.65 lakh | -78.1% |