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Airtel, Jio-Mere 2% sequential revenue growth in Q1FY25 expected

Bharti Airtel and Reliance Jio are expected to see a sequential growth of around 2% in revenue in the April-June quarter. The growth, which will be similar to the preceding quarter, will be led by an increase in data consumption, new subscriber additions and postpaid adoption, according to analysts.

However, analyst estimates suggest Vodafone Idea will continue to witness a decline in revenue for the third straight quarter. The telecom operator could see a 0.5% sequential fall in revenue to `10,550 crore, owing to subscriber loss and the absence of network expansion.

“We expect Bharti to report a stable set of numbers in Q1 led by India cellular revenues to be up 2% q-o-q and steady momentum in homes/enterprise,” BofA Securities said in a note. “For VIL, this is not a turnaround quarter as network investments are yet to pick up,” the brokerage added.

Vodafone Idea is expected to see its losses narrowing marginally to `7,600 crore from `7,675 crore in the January-March quarter, according to analysts.

Estimates from ICICI Securities suggest that Airtel is expected to see an increase of around 91% q-o-q in net profit to `3,958 crore at a consolidated level. Reliance Jio’s net profit is seen increasing 2.5% to `5,468 crore, the brokerage said.

Bharti Airtel’s consolidated profit is seen rising in the quarter owing to the low base of the preceding quarter when the company incurred a one-time expense on account of currency devaluation in its group subsidiary, Airtel Africa. Besides, ebbing of 5G capex is also seen adding to the bottomline.

Further, the operating profit or Ebitda of Airtel and Jio is expected to grow owing to moderation in 5G capex, according to analysts. The margins are expected to be flat because of adoption of unlimited free 5G.

“Revenue growth is unlikely to translate into Ebitda margin expansion due to increasing 5G adoption, which will lead to higher 5G expensing that was capitalised during FY23-FY24. We estimate wireless Ebitda margins to be largely flat in Q1FY25,” Axis Securities said.

On the operating metrics of telecom operators, the overall subscriber growth is expected to be strong. “We expect Jio’s strong subscribers addition trend to continue, driven by push of its Jio Bharat phone; 9 million net subs addition (including FTTH subscribers addition) is likely in Q1FY25,” JM Financial said.

According to the brokerage, Bharti’s India wireless business is expected to continue to report strong mobile broadband subscriber addition at 6.2 million in Q1FY25. On the other hand, Vodafone Idea may lose around 2 million subscribers.

In the January-March quarter, Bharti Airtel’s mobile subscriber base was at 352 million, while that of Jio and Vodafone Idea were at 482 million and 213 million, respectively.

As the recent tariff hikes will take about two quarters to reflect in telcos’ revenue, the average revenue per user (Arpu) growth is seen flat in the April-June quarter. Among the operators, Bharti Airtel’s Arpu is seen at `210, an increase of 0.5% from `209 in the preceding quarter, whereas Jio and Vodafone Idea’s Arpu is expected to be flat at `182 and `146, respectively.

In the April-June quarter, the industry’s data volume is expected to grow 3% q-o-q to nearly 66.4 trillion MB.

On the other hand, growth in voice consumption on the telcos’ network is expected to be about 1% at 3.1 trillion minutes.

Investors will keep a close eye on telcos guidance on tariff hikes translating into revenue growth, Vodafone Idea’s network expansion, 5G monetisation, and fixed wireless access penetration. Financial Express

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