Nifty pack’s top loss maker of last 6 quarters all set to turn the corner

Nifty pack’s top loss maker of last 6 quarters all set to turn the corner

NEW DELHI: After reporting a loss of over Rs 48,000 crore for the last six quarters, this Nifty firm is all set to turn profitable in the December quarter.

Analysts mostly expect the stock to be the biggest Nifty winner of 2021, even after its price almost doubled from its March 2020 low. Analysts are gung go on the stock, and have it in their model portfolios as the best sectoral pick.

The stock is Bharti Airtel.

The company reported a consolidated loss of Rs 763 crore for September quarter, on the back of a massive Rs 15,993 crore loss in June quarter, a Rs 5,237 crore loss in March quarter and a Rs 1,035 crore loss in the year-ago quarter.

A turnaround is ahead, said analysts.

Emkay Global has projected the telecom major to report a Rs 81.30 crore profit for the December quarter. It sees the margin for the Sunil Mittal firm expanding to 45.1 per cent in the December quarter, from 42.1 per cent in the corresponding quarter last year. Sales are projected to rise 15 per cent to Rs 25,244 crore.

“Reported Ebitda growth shall be muted due to deconsolidation of the tower business, with the same being accounted as an associate, while operating leverage shall restrict any meaningful margin contraction,” Emkay said.

India wireless revenues are likely to rise 7 per cent sequentially, aided by healthy expansion in its subscriber base by 70 lakh, accompanied by data subscriber addition of 1 crore. Its average revenue per user (Arpu) is seen rising 3 per cent sequentially.

“Revenues for the home broadband segment shall dip 1.2 per cent QoQ due to the full impact of lower priced plans, while seasonality shall restrict growth for the enterprise segment. Africa business is likely to post a 3.5 per cent QoQ increase in revenues, on an already strong base quarter. Data volume shall continue on its positive trajectory with 6 per cent QoQ increase,” Emkay said.

JM Financial said Bharti Airtel may outperform Jio in subscriber additions for the second quarter in a row, primarily due to Bharti’s higher subscriber market share among incremental mobile broadband (MBB) users.

It pegged its Q3 profit at Rs 420 crore. India wireless Arpu, it said, may rise to Rs 165 from Rs 135 year on year due to a rise in MBB users.

“We expect 1.05 crore net subscribers addition and 1.5 crore MBB subscriber additions in Q3FY21E in the India wireless business. While consolidated revenue is expected to increase 3.3 per cent QoQ, we expect a marginal 0.6 per cent QoQ decline in reported Ebitda due to deconsolidation of Indus Towers post- merger in November,” it said.

Motilal Oswal Securities projected Q3 profit at Rs 534.70 crore on a 21 per cent rise in sales at Rs 26,662 crore. Investors, the brokerage said, would watch out for the management commentary on spectrum renewal.

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