One-offs in Bharti has pulled its AGR market share up, ICICI Securities

Industry AGR (incl. NLD) grew 14.7% YoY / 3.7% QoQ to Rs457bn on continued growth in subscriber (sub) base; 4G and postpaid sub adds also contributed to ARPU improvement.

In past two quarters, Bharti Airtel’s (Bharti) AGR was inflated due to other income of Rs13bn and Rs10bn.

Its AGR growth of 1.3% QoQ came in line with its quarterly filing. Its AGR (incl. NLD) market share rose 60bps YoY to 32.7% adjusted for higher other income.

VIL’s AGR (incl. NLD) market share was disappointing at <20%; circle-wise analysis shows VIL has only three circles with >25% AGR market share.

RJio’s AGR (incl. NLD) grew 10.5% QoQ (on low base) / 17.5% YoY, and

its market share rose 100bps YoY to 39.5%.

• Industry AGR (incl. NLD) rose 14.7% YoY / 3.7% QoQ to Rs457bn.Despite no tariff hike, industry AGR continued to rise on sustained growth in sub-base, shift to 4G from 2G, and rising postpaid subs. It also includes other income such as dividend of Rs13bn in Q4FY21 and Rs10bn in Q1FY22 for Bharti, which optically helped AGR. Industry GR has grown at a slower rate of 1.9% YoY on nil IUC revenue in Q1FY22, while it has increased by only 0.2% QoQ to Rs493bn.
• Bharti’s AGR (incl. NLD) up 24.4% YoY / 1.3% QoQ to Rs160bn. Bharti’s AGR benefitted from higher other income (dividend received from Indus Towers and Nettle Infrastructure); thus its RMS for past two quarters has been inflated and may decline in Q2FY22 with normalisation of other income. Bharti’s AGR market share stood at 34.9% though, adjusted for other income of Rs10bn, it was 32.7% in Q1FY22 (up 60bps YoY).
• VIL’s AGR (incl. NLD) market share at just 18.6%.VIL’s AGR (incl. NLD) dipped 0.6% YoY / 2.5% QoQ to Rs85bn on loss of subs, while decline in 4G and postpaid subs hurt its ARPU. Its market share has shrunk significantly to <20% even if we adjust for Bharti’s one-off income. Our circle-wise analysis show VIL’s market share has dipped to ‘low to mid single digit’ in all C circles, and is in teens in 11 circles. The only circle where its market share is in a respectable position is Kerala. Huge efforts will be required to pull the market share up from these levels.
• RJio’s AGR (incl. NLD) rose 17.5% YoY / 10.5% QoQ to Rs181bn.QoQ growth is higher for RJio due to low base from probably some one-offs in the previous quarter. Its revenues have grown 3.8% from its Q3FY21 AGR, which is more representative. Its AGR (incl. NLD) market share stood at 39.5%, up 100bps YoY. RJio has been growing well across circle categories with YoY growth of 19.6% / 17.2% / 16% / 17.3% across Metro / A / B / C circles, which is impressive. It has the additional benefit from good acceptance of the new Jiophone offer. However, we are surprised at the revenue growth in ISP category (Rs690mn only), which has been volatile and low despite while steady growth in subs.

CT Bureau