On Thursday, Bharti Airtel reaches a colossal milestone as it crossed Rs. 3 lakh crore market capitalisation, to give this some perspective, not even 10 companies in India have reached this feat.
In today’s session, the share price of Bharti Airtel reached a new high as a share was floating at Rs. 552. 85 on the BSE (Bombay Stock Exchange), up by 3.1%. This brought Bharti Airtel’s MCap at Rs. 3.01 lakh crore.
This year, Airtel has gained over 21% already and have advanced 95% since February last year.
By attaining such a huge feat, the company has joined the likes of HDFC Ltd., Tata Consultancy Service (TCS), Reliance Industries Ltd. (RIL), Hindustan Unilever Ltd. (HUL), Infosys Ltd., and others. Top 10 Companies with their MCap in India according to SEBI, as of 5th February 2020:
|S. No.||Company Name||MCap (In Crore)|
|1||Reliance Industries Ltd.||9,17,953|
|2||Tata Consultancy Services Ltd.||8,04,980|
|3||HDFC Bank Ltd.||6,81,651|
|4||Hindustan Unilever Ltd.||4,67,631|
|5||Housing Development Finance Corporation Ltd.||4,13,487|
|6||ICICI Bank Ltd.||3,48,704|
|8||Kotak Mahindra Bank Ltd.||3,23,212|
|9||Bharti Airtel Ltd.||3,91,053|
|10||State Bank of India||2,77,510|
As of 5th February 2020, the total MCap of companies listed on BSE was Rs. 1,58,18,589 crore. The top 10 companies enjoys over 31% of the total MCap. There are 100 companies listed on BSE.
Mukesh Ambani led RIL retains the 1st position on the list of most valued companies with MCap of almost Rs. 9.18 lakh crore. TSC and HDFC Bank ranks 2nd and 3rd with MCap of Rs. 8.04 lakh crore and Rs. 6.81 lakh crore respectively.
In February, Airtel reported that it is closer to zeroing its quarter on quarter losses. In the quarter ended in September 2019, the company reported a loss of Rs. 23,415 crore however the loss reported for the quarter ending in December was reported at Rs. 1,035 crore. Though the loss is still huge, the reducting in loss is huge. The company had kept funds aside to pay the dues to the government as the Supreme Court of India passed its judgment.
Airtel’s consolidated revenue from operations increased to Rs. 21, 947 crores (8.5%) and consolidated Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) for the quarter also grew to Rs. 9,270 crore (5%) as a result of reduced network cost.
In a note issued to investors by the financial service firm Motilal Oswal it was stated that “The recent price hike, along with healthy 4G subscriber adds, improved ARPU (Average Revenue Per User), which in turn led to an increase in EBITDA. Further, moderating network OpEx (operating expenditure) and CapEx (capital expenditure) resulted in healthy annualized FCF”.
Airtel’s monthly ARPU from its mobile services in India increased by Rs. 7 to reach Rs. 135 in the quarter ended in December, from Rs. 128 in the quarter ended in September. Even the company’s subscribers increased to 28.3 crore, an increase of 36 lakh subscribers.
In addition to this, the company’s net debt was reduced to Rs. 84,800 crores (excluding lease liability), a reduction of Rs. 3,360 crore. Airtel also generated Rs. 4,170 as operation Free Cash Flow (FCF). Jefferies India, another financial services firm said, “Airtel reported strong 3Q with Mobile ARPU up 5% QoQ and mobile margins +110bps QoQ… The key for the sector going forward is the level of elasticity in data usage. While we expect Bharti’s market share and ARPU to increase, it already trades at 8x FY22E EV/EBITDA. Given our view of data elasticity, we expect ARPU increase post current hike to be gradual” in a note issued for its investors.