Bharti Airtel Q3 Results Surprise Street as Core Profit Rises but Reported Profit Falls
Bharti Airtel’s December-quarter earnings offered a mixed but largely encouraging picture for investors, as strong operating performance and subscriber upgrades drove healthy growth in core profit, even as reported net profit declined due to last year’s exceptional gains.
India’s second-largest telecom operator reported its seventh straight quarterly rise in underlying profitability, highlighting resilience in a competitive telecom market. The results come at a time when investors are closely tracking telecom stocks for signs of tariff-led growth, margin expansion and balance-sheet improvement.
While headline profit after exceptional items showed a decline, analysts say the underlying numbers paint a stronger story of improving business fundamentals and cash generation.
Core Profit Growth Highlights Strong Operating Momentum
Bharti Airtel posted a consolidated net profit before exceptional items of ₹6,920 crore for Q3 FY26, marking a 25.5% year-on-year (YoY) jump. This reflects stronger operating metrics and improved realizations from customers migrating to higher-value plans.
However, reported net profit after exceptional items fell 55% YoY to ₹6,630.5 crore. The decline was largely due to a high base last year, when the company booked a sizeable exceptional gain related to the reclassification of Indus Towers from associate to subsidiary.
Profit before tax rose 34.4% YoY to ₹12,558 crore, underlining that the core business continues to expand. For long-term investors, such adjusted metrics are often more relevant than headline numbers distorted by one-off items.
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Revenue and EBITDA Growth Show Healthy Business Expansion
Consolidated revenues rose 19.6% YoY to ₹53,982 crore, driven by steady subscriber additions and higher data usage. Growth in both India and Africa operations supported the topline.
EBITDA increased 25.2% YoY to ₹31,144 crore, while EBITDA margin expanded to 57.7% from 55.1% a year ago. Sequentially, EBITDA rose 4.1% and margins improved by 30 basis points, indicating continued operating leverage.
EBIT for the quarter stood at ₹17,654 crore, up 34.5% YoY, with margins improving to 32.7%. Such margin expansion is closely watched by investors as it signals pricing power and cost efficiency.
ARPU Growth and Subscriber Additions Strengthen India Story
A key highlight for the Street was continued ARPU improvement. Average Revenue Per User (ARPU) rose to ₹259 from ₹245 a year ago, reinforcing the trend of customers upgrading to premium plans.
India revenues stood at ₹39,226 crore, up 13.2% YoY. India mobile revenue grew 9.1% YoY, supported by higher ARPU and rising smartphone data usage.
Customer metrics showed traction:
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India customer base at 466 million vs 450 million earlier
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0.62 million postpaid net additions
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Postpaid base at 28.1 million
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Smartphone data customers up 20.8 million YoY
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79% of mobile users now on smartphones
These figures matter because higher-quality subscribers typically translate into better margins and stable cash flows.
Africa and Home Business Add Growth Layers
Airtel Africa continued to deliver strong performance. Its customer base reached 179 million, while revenue in constant currency rose nearly 25% YoY. EBITDA margin in Africa improved to 49.3%, up 234 basis points.
The Homes segment recorded robust 32.6% YoY revenue growth, with 1.2 million new customers added, taking the base to 13.1 million. Airtel Business revenue rose sequentially, while Digital TV revenue stood at ₹755 crore with a 15.4 million customer base.
Such diversified revenue streams reduce dependence on a single segment and are viewed positively by institutional investors.
Capex and Infrastructure Investments Signal Long-Term Focus
Bharti Airtel continued to invest heavily in network expansion. Consolidated capex for the quarter stood at ₹11,787 crore, including ₹9,249 crore in India and ₹2,537 crore in Africa.
During the quarter, the company deployed:
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1,147 towers
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16,338 mobile broadband base stations
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~30,000 km of fiber added over nine months
These investments strengthen digital infrastructure and support future data demand, though they also keep near-term free cash flows in focus for investors.
Management Commentary Reflects Confidence
Gopal Vittal, Executive Vice Chairman of Bharti Airtel, said:
“Our balance sheet strength, reinforced by strong cash generation and sustained deleveraging, positions us well to invest in new growth opportunities.”
He added that India mobile saw sequential growth driven by quality customer additions and a better portfolio mix. Such commentary signals management confidence in sustainable growth.
Here’s What Happened Today and Why Traders Reacted
On result day, market participants dissected the difference between core profit growth and headline profit decline. Traders initially reacted cautiously to the reported drop in net profit but sentiment improved as the Street focused on operational strength.
Traders reacted to:
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Strong ARPU growth
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Margin expansion
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Healthy subscriber additions
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High capex levels
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Adjustments for exceptional items
Telecom stocks often see volatility on earnings days as short-term traders respond to headline numbers, while long-term investors focus on fundamentals.
What This Means for Investors and Their Portfolios
For investors, the Q3 results reinforce Bharti Airtel’s position as a structural telecom growth story. Rising ARPU, strong margins and deleveraging support the long-term thesis.
Key investor takeaways:
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Core business remains strong despite headline noise
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ARPU growth is a major positive trigger
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High capex supports future growth but needs monitoring
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Suitable for long-term portfolios seeking telecom exposure
In the coming days, Airtel’s stock movement may depend on broader market sentiment and telecom tariff expectations. But fundamentally, the company appears to be strengthening its earnings base.
