Bharti Airtel's revenue grows 16.7%, but costs temper profit

Bharti Airtel Limited (NSE: BHARTIARTL) reported Q2 FY27 consolidated revenue of ₹60,878 crore, up 16.7% year on year. Net profit rose 31% to ₹8,888 crore, but missed the analyst estimate of ₹9,673 crore. What happened Average revenue per user increased 6% to ₹271 from ₹256 a year ago. The company added 18.8 million 4G and 5G users over the year. Its consolidated EBITDA reached ₹35,240 crore, with a margin of 57.9%. However, network operating costs increased 11% and licence fees rose 13%. Total expenses increased approximately 15% to ₹25,932 crore, putting pressure on the conversion of revenue growth into profit. Why it matters Airtel's premiumisation strategy is working. Higher-value plans and customer upgrades are improving ARPU even without broad-based tariff increases since July 2024. But the latest result shows that higher realisations alone are not enough if network and regulatory costs continue rising. The next leg of earnings growth may depend on a combination of further ARPU improvement, cost discipline and industry-wide tariff increases. Analysts have discussed a potential 12-15% tariff increase over the coming months, but this is an expectation, not an announced decision. What to watch next Track ARPU, network cost growth and postpaid additions in Q3 FY27. Any tariff revision will be an important catalyst, but its impact should be assessed alongside customer retention and usage trends. Stance: Constructive on the underlying business and premiumisation strategy, but cautious on near-term earnings conversion. Sustained ARPU growth accompanied by slower cost growth would strengthen the investment case.