Latest news with #Arpu
Mint
21-05-2025
- Business
- Mint
Five stocks to watch: These companies reported over 500% jump in profit in Q4
Investors often look for stocks that have the potential to offer multibagger returns. However, companies that can consistently compound returns over the long term tend to share a few core traits: expanding margins, steady revenue growth, and, most importantly, strong profit growth. It all starts with revenue. If a company is growing its top line, the next thing to watch is whether that growth translates into meaningful profits, ideally supported by improving margins. Profit growth stands out as the most critical. That's because stock prices eventually follow earnings. A company's market value is essentially its profit multiplied by the price-to-earnings ratio. We have selected stocks that reported more than 500% profit growth in Q4 FY25. #1 Bharti Airtel Airtel is India's second-largest telecommunication company, after Reliance Jio, with 362 million subscribers. Its 5G user base is 135 million, while home broadband user currently stands at 46 million. The company's revenue grew 27% to ₹47,880 crore in the fourth quarter of FY25. The growth was driven by higher average revenue per user (Arpu), which rose to ₹245 from ₹209 in Q4FY24. Earnings before interest, tax, and depreciation (Ebitda) margin increased to 56.4%, as economies of scale kicked in. As a result, net profit rose 503% from last year to ₹12,480 crore. Looking ahead, the company is expected to hike tariff charges further, increasing Arpu. The management has said that Arpu in India is still among the lowest globally and more tariff hikes are required to ensure financial stability. Airtel is also prioritizing investments in home broadband and data centers. It plans to double its data center capacity to 400 megawatts in three years. It aims to balance its priorities, such as deleveraging the balance sheet, increasing dividends, and bolstering business-to-business adjacencies. The company has regulatory dues of ₹92,000 crore. #2 Zee Entertainment Zee Entertainment is one of the largest global content companies connecting 1 billion people. The company operates 50 channels in 11 Indian languages, reaching over 859 million viewers nationwide and has a 16.8% television network share. The company's fourth quarter sales remained flat at ₹2180 crore. Advertising revenue accounts for 38% of total revenue, subscription revenue 45%, and the rest comes from other services. However, cost optimization led to an expansion in margins. This, along with a fall in depreciation and exceptional expenses, led to a 1,346% jump in net profit to ₹190 crore. Looking ahead, Zee plans to allocate 40% of its free cash flow to strengthen its regional content, music, digital platforms, and international expansion. It also expands its content distribution through free-to-air television, connected television, and fast channels. The company has partnered with telecom providers to boost the reach and monetisation of Zee5. It's also looking to unlock value through music and syndication. The company aims to grow revenue from advertisement by 8-10%, achieve Ebitda margins of 18-20%, and a free cash flow to net profit ratio of over 1.2 times. It also plans to double advertising contributions by FY28 and reward shareholders by setting aside 25-30% of net profit for dividends. #3 Dilip Buildcon Dilip Buildcon is India's leading engineering, procurement, and construction contractor. The company constructs roads, bridges, highways, mines, irrigation systems, metro, and airports. Dilip Buildco's revenue rose 8% to ₹2,320 crore. However, the margin doubled to about 21%, leading to a massive 9,133% jump in net profit to ₹280 crore. Looking ahead, the company order stands at ₹14,900 crore, just 1.3 times its FY25 revenue of ₹11,300 crore. The order book is diversified, with 21% coming from roads, irrigation (21%), mining (24%), and water (6%). However, the low order book to revenue ratio implies the company can face an earnings slowdown soon. The company forecasts consolidated revenue growth of 10-15% and operating margins of 10-11% in FY26. The management has indicated a slowdown in ordering in the near future and estimates order inflows between ₹15,000-20,000 crore. #4 Dhanlaxmi Bank Dhanlaxmi Bank has an operational track record of over 97 years. It has a strong franchise in South India. The bank has a network of 261 branches, with more than 80% across the region in Tamil Nadu, Andhra Pradesh, Telangana, Kerala, and Karnataka. Its operating income increased by 14.5% to ₹350 crore driven by a 28% rise in net interest income and a fall in the cost-to-income ratio. The net interest margin also increased to 3.46%. The net profit grew massive 867% due to an over 50% fall in tax expense. As a result, the bank return on assets also grew to 0.41%. The company gross non-performing assets (NPA) declined to 2.98%, from 4.05% last year. The net NPA too declined to 0.99%, from 1.25%. #5 Paradeep Phosphates Paradeep Phosphates is one of the largest manufacturers of di-ammonium phosphate (DAP) and nitrogen-phosphorus-potassium (NPK) fertilisers in the country. It has a production capacity of 2.6 million metric tonnes per annum (MMTPA). Through its two manufacturing plants located in Odisha and Goa, PPL reaches over 9.5 million farmers across 15 states. The company's revenue grew 56% to ₹3,490 crore, led by strong sales volumes. Total fertilizer sales grew 47%, N-20 sales grew 61% and other NPK sales grew 73%. The company's Ebitda margin increased to 11%. This led to a sharp 627% jump in net profit to ₹160 crore. Looking ahead, the company expects to benefit from the ₹37,200 crore budget allocated for phosphatic fertilizer subsidy. The company is also witnessing strong industry-wide growth in NP/NPK production (up 18.7%) and sales (up 28.4%). The company aims to increase market share amid a strong demand scenario. To meet the demand, the company plans to increase phosphoric acid capacity to 0.7 million and sulphuric acid capacity to 2 million tonnes from 1.4 million. It's also making capital expenditure to improve energy efficiency at its urea plant, which is expected to reduce energy consumption. These initiatives are expected to improve the company's cost structure and margins, aiding to the overall profit generation. Conclusion Profit growth is one of the key metrics used to identify companies with strong fundamentals and the potential to generate outsized returns. Since the profit growth of these firms has been on a low base, it would be challenging for them to maintain the earnings growth rate. That's why it is crucial to assess the company's fundamentals, including its financial performance, corporate governance practices, and growth prospects, rather than relying solely on the hype. Happy Investing. Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. This article is syndicated from
Mint
15-05-2025
- Business
- Mint
Bharti Airtel eyes growth through price hikes for high-end users
Bharti Airtel Ltd's average revenue per user (Arpu) for the March quarter (Q4FY25) was flat sequentially at ₹245, but management clarified it would have been ₹248 had it not been for two fewer days in the quarter. It sees future Arpu growth coming more from tariff hikes for higher-end subscribers, who use more data, while the entry-level tariff is likely to remain flat or increase only slightly. Explaining this in detail, management said if entry-level plans in India are indexed at 100, then the top end is at 250. This rises to 500 when compared to Indonesia, a market that's similar to India in terms of geographical size (India is 3 million sq km; Indonesia is 2 million sq km; China is much larger at 10 million sq km) and population density. In short, this is the level of tariff repair the industry needs, provided all players (especially Reliance Jio) come on board. Also read: For Shree Cement, earnings a bigger priority than volumes For now, Bharti's Q4FY25 mobile service revenue in India grew 1.3% sequentially to ₹26,617 crore, in line with subscriber-base growth of 1.4% to 361.6 million. Ebitda increased 2% quarter-on-quarter with a 35 basis points margin expansion to 59.2%. Africa business outperforms India Bharti's Africa telecom business, which is about 40% of the size of the Indian mobility business, has outpaced growth in the latter in both rupee terms and USD constant-currency terms (calculated using the currency rate at the end of March 2024). The revenue growth rate for the Africa business in rupee terms was 6.3% quarter-on-quarter to ₹11,376 crore, while constant-currency growth was 3.4%. Ebitda grew 7% quarter-on-quarter to ₹5,381 crore, with constant-currency growth at 4.5%. As the Africa telecom business reported faster growth compared to India, Bharti could consider increasing its stake in the business further from the current 56%. African currencies, though stable over the past few months, are typically volatile, and any further depreciation could pose a business risk. Capex to slow down Bharti's total capital expenditure of ₹14,400 crore in Q4FY25 was up by a staggering 56% sequentially, mainly due to investments in the enterprise business – data centers and cloud services. Management indicated that the capex should not be seen on a quarterly basis as some quarters are lumpier than others. Its capex intensity in India is likely to be lower in FY26 as the rural rollout is largely complete. Also read: Tata Motors' windscreen is hazy amid the fog of tariffs Management intends to use free cash flow to reduce debt and increase the dividend. However, the company has not yet formulated a dividend payout policy. Also, exactly when it plans to increase its stake in the Africa business and Indus Towers remains uncertain. Bharti has not yet decided to convert adjusted gross revenue (AGR) dues into equity to be allotted to the government. It has only asked the government if that option is available in view of Vodafone Idea Ltd opting for it. Satellite internet threat What about competition from satellite internet? Bharti clarified that its arrangement with Starlink would not harm its telecom business as Starlink is likely to be used in places where terrestrial connectivity in the form of mobile towers is unavailable. Nuvama Institutional Equities has a target price of ₹2,130 for Bharti based on a sum-of-the-parts valuation. Though there has been talk of scaling up the non-mobility businesses, almost 90% of the valuation is ascribed to the mobile service business in India, valued at 13.5 times estimated Ebitda for FY27. The stock could remain range-bound until further tariff hikes for mobile services are announced. On Thursday shares of Bharti Airtel rose 1.58% to ₹1,863.10. The stock is up about 17% so far this year, and a massive 242% over the past five years. Also read: SRF's growth momentum is strong, but global uncertainties pose risk
Mint
13-05-2025
- Business
- Mint
Airtel profit up fivefold, revenue misses estimates
Bharti Airtel Ltd clocked a fivefold jump in March quarter profit, thanks to a one-time gain, even as revenue per user, a key metric of profitability, remained flat. Net profit at India's second-largest telecom operator stood at ₹11,022 crore against ₹2,072 crore a year earlier, as it added a deferred tax benefit of ₹5,913 crore. However, compared to the December quarter when it gained from the Indus Towers consolidation, profit was 25.4% lower. Consolidated Q4 revenue of ₹47,876 crore was up 27.3% on-year and 6.1% on-quarter, driven by higher India business, revenue growth in Africa and the full impact of Indus Towers consolidation. The India mobile services business, which contributes 56% to overall revenues, saw revenue growth of 20.6% on-year to ₹26,617 crore, driven by higher tariffs, smartphone user additions and premiumization efforts, the company said. Also read: Starlink secures approval to operate in India Airtel Business, which houses services to enterprises and contributes 11% to total revenue, fell 2.7% YoY to ₹5,315 crore. Overall, the revenue figures missed estimates of ₹49,200 crore, according to average estimates of five brokerage firms. 'Airtel Business revenue moderation was in line with our strategy outlined last quarter to shed our low-margin wholesale business while underlying growth continues to remain steady," vice chairman and managing director Gopal Vittal said, adding Airtel ended FY25 'on a strong note". Last quarter, the company had announced plans to exit the low-margin wholesale commodity voice and messaging business. Airtel's India average revenue per user (Arpu) was flat at ₹245 in the March quarter. In comparison, India's No. 1 carrier Reliance Jio's Arpu rose to ₹206.2 from ₹203.3 in the December quarter. Vodafone Idea is yet to release its quarterly figures. Airtel's revenue miss and flat Arpu assume significance as rival Reliance Jio intensifies efforts to capture market share. At the same time, investors are closely watching the entry of satellite broadband players like Starlink, whose presence could significantly alter the competitive landscape of the telecom sector in the coming years. Also read: Q4 earnings: Jio set for steady growth on last tariff hike, customer additions Crisil Ratings in a note said that the industry Arpu is expected to rise by ₹20-25 to reach ₹225-230 by the end of this fiscal, assuming tariffs remain stable. 'Around 55-60% of the incremental Arpu is expected to come from rural subscribers," said Anand Kulkarni, director at Crisil Ratings. According to Kulkarni, relatively lower Internet penetration in rural regions will drive migration of subscribers to data plans. During the March quarter, Bharti Airtel also incurred an exceptional loss of ₹140.1 crore to settle a legal dispute over the group's erstwhile subsidiary in Africa. Airtel's India business revenue at ₹36,735 crore was up 28.8% on-year and 6% on-quarter. Revenue was impacted by portfolio transformation, in line with its stated strategic goal to eliminate low-margin business, Airtel said. Last quarter, it had announced plans to exit the low-margin wholesale commodity voice and messaging business. 'India revenue increased by 6%. Africa continued its underlying performance even as there was steadiness on currency. India mobile business grew by 1.3% sequentially, despite having two less days in the quarter. Growth was driven by premiumization. We added 6.6 million smartphone users and maintained an industry-leading ARPU of ₹245," Vittal said. Vittal added that the company's balance sheet is solid, supported by strong cash generation, disciplined capital spending and ongoing debt reduction. The company prepaid ₹5,985 crore of high-cost spectrum dues in March, totalling prepayment of over ₹42,000 crore in the last two years. While earnings before interest, tax, depreciation and amortization (Ebitda) rose 39.9%% to ₹27,404 crore in the fourth quarter, Ebitda margin rose by 240 basis points to 57.2% from 54.8% a year earlier. Net debt rose to ₹2.04 trillion in the quarter from ₹1.94 trillion a year ago. The telco incurred a capex of ₹14,401 crore during the quarter. Airtel recently proposed to convert some government dues into equity like its smaller rival Vodafone Idea Ltd. Investors are expected to track the company's view on the matter at its analysts' call on Wednesday, along with developments on the termination of merger talks with Tata Play for direct-to-home (DTH) business, spectrum takeover from Adani group, and guidance on further tariff hikes. Also read: New satcom rules key to cross-border security, says minister The telecom operator added 0.6 million postpaid users in March quarter, taking its overall user base to 25.8 million. In the March quarter, Airtel added 18.2 million customers in the country, taking its total base to 424.5 million customers at the end of March. Of the total users, the company's India mobile user base was at 361.6 million, up from 356.6 million in the preceding quarter and 352.2 million in the year-ago period. Mobile data consumption in India surged 21.2% to 21 billion GB, with average monthly usage reaching 25.1 GB per customer. In comparison, Reliance Jio's total data traffic rose 19.6% YoY to 48.9 billion GB. Further, Jio's average data consumption per user per month on the company's network was at 33.6 GB. Homes business, which includes home wi-fi, broadband and TV connectivity, saw revenue rising by 21.3% on-year to ₹1,596 crore, while its fixed wireless access service saw addition of 812,000 customers to reach a total base of 10 million. 'We expanded our home-pass network at an accelerated pace with over 2.0 Mn home passes in the quarter," Airtel said. Airtel declared its results after market hours. Earlier, shares of the company closed 2.7% down at ₹1820.95 on BSE.
