Telecom giant Bharti Airtel is expected to report a steady set of numbers for the December quarter, with brokers expecting healthy revenue growth and sharp profit growth, driven by continued ARPU expansion in India, strong growth in its home broadband business and solid performance from Africa.According to an average of six brokers, Airtel’s consolidated revenue is expected to grow about 18% year-on-year in the third quarter, while adjusted profit after tax will grow 35% in the same period. On a sequential basis, most analysts expect growth in the low to mid-single digits, reflecting a stable operating environment rather than a one-time trigger.
The wireless business in India is likely to remain the key earnings driver. Analysts broadly agree that ARPU improvement, led by the continued migration from 2G to 4G and the addition of higher quality subscribers, will continue to support revenue growth.
UBS estimates that mobile revenue in India will grow 2.3% quarter-on-quarter, driven by a 1.7% improvement in implied ARPU. The brokerage highlights that while the total number of net subscribers is muted, Airtel has consistently added higher value postpaid users, a trend that has accelerated over the past few quarters.
Hero MotoCorp Q3 Expectations
Hero MotoCorp is expected to report a healthy set of numbers for the December quarter, supported by strong festive demand, better product mix and price increases, even as market share pressure continues in some segments. According to an average of six brokers, Hero MotoCorp’s revenue is expected to grow about 19% year-on-year in the third quarter, while profit after tax will rise 17% year-on-year. Sequential growth is expected to be more modest, reflecting a stable business environment following the holiday boost. Volumes will likely be the main driver this quarter. Most analysts expect volume growth in the mid-teens, aided by festive demand and recovery in rural markets. HSBC expects total volumes to remain flat quarter-on-quarter but increase by around 16% year-on-year. Kotak Equities is also posting 16% year-on-year volume growth, driven by strong festive trends.
Pricing and product mix are expected to provide incremental support. HSBC notes that discounts were flat sequentially, while the company implemented a price increase of about 50 basis points during the quarter. Kotak expects average sales prices to rise 2-2.5% year-on-year, helped by a richer mix, including a higher share of exports and scooters.
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