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Q1 preview for the telcos

Vodafone Idea’s June quarter performance is likely to be muted in the absence of network expansion. The quarter could be a steady one for Bharti Airtel Ltd, aided by average revenue per user (ARPU) expansion of 5 per cent YoY and continued strong performance of its non-mobile segment, ICICI Securities said in its Q1 preview note for the telecom sector. On Reliance Jio Infocomm, the domestic brokerage said the telecom operator’s subscriber growth has decelerated slightly, but are still high. It sees ARPU growth for RJio to be restricted due to the adoption of free data by 5G users.

In the case of Tata Communications, data performance may be muted with 1 percent QoQ growth but on a YoY-basis it may appear high due to the merger of Switch and Kaleyra. Consolidated Ebitda margin is likely to be flattish QoQ, ICICI Securities said.

ICICI Securities said Bharti Airtel’s ARPU may grow 5.1 per cent YoY to Rs 210; and Bharti Hexacom’s to rise 5.6 per cent YoY to Rs 205. RJio and VIL’s ARPU is seen flattish QoQ at Rs 182 and Rs 146, respectively.

“ARPU growth only supported by 2G to 4G, and postpaid adoption while free data on 5G is leading to downgrades in 4G plans,” the brokerage said.

Subscriber additions
All eyes shall be on management commentary on tariff hikes translating into revenue growth. RJio subscriber addition is still quite high, but slightly softer versus the trend from the past four quarters, up 75 lakh or 1.6 per cent QoQ. Bharti’s subscriber addition could be steady at 40 lakh and Vodafone Idea’s subscriber loss may be 30 lakh, pending network rollout. Bharti Airtel’s data subscriber addition may be steady at 65 lakh, ICICI Securities said.

Bharti Airtel Q1 results preview
ICICI Securities expect Bharti Airtel’s domestic revenue to rise 1.5 per cent QoQ (10.1 per cent YoY) to Rs 29,300 crore led by mobile segment (up 2 per cent QoQ/10.4 per cent YoY) in Q1FY25. India Ebitda is likely to grow 1.5 per cent QoQ (up 9.6 per cent YoY) to Rs 15,500 crore, restricted by recognition of 5G-related costs.

“Bharti Africa’s dollar revenue to grow 1 per cent QoQ to $1,129 million and Ebitda to grow 1 per cent QoQ to $522 million, but a steep decline on a YoY-basis due to African currencies’ depreciation against dollar. Consolidated revenue is likely to grow 1.5 per cent QoQ to Rs 38,200 crore and Ebitda to grow 1.5 per cent QoQ to Rs 19,700 crore. Net profit is seen at Rs 4,000 crore, partly hurt by higher 5G related cost (amortisation and interest cost),” it said.

Vodafone Idea Q1 results preview
Vodafone Idea’s Ebitda may decline 0.9 per cent QoQ to Rs 4,300 crore, ICICI Securities said. It expects VIL’s sales to drop 0.9 per cent QoQ to Rs 10,500 crore due to subscriber losses, while ARPU will likely remain stable on the absence of any material 4G net additions.

“We expect Ebitda to decline 0.9 per cent QoQ, as operating cost remains under-control on pending network rollout. Net loss is seen at Rs 7,600 crore (nil tax rebate),” it said.

RJio Q1 results preview
RJio’ Ebitda is likely to rise 10.4 per cent YoY to Rs 13,900 crore. RJio’s Q1FY25E revenue is estimated to rise 10.1 per cent YoY/2 per cent QoQ to Rs 26,500 crore, benefiting from strong subscriber additions both in the mobile business and fixed broadband (driven by FWA), ICICI Securities said.

Tata Communications Q1 results preview
Tata Communications’ data business revenue is seen rising 1 per cent QoQ. ICICI Securities expects voice revenue to dip 2 per cent QoQ and Ebitda margin at 9 per cent against 10.3 per cent in Q4FY24).

“We estimate data revenue to rise 1 per cent QoQ and +20.1 per cent YoY (benefiting from Switch and Kaleyra merger). Data business’ Ebitda margin to grow 10 bps QoQ at 18.5 per cent. Consolidated revenue and Ebitda to grow 0.8 per cent and 0.9 per cent QoQ to Rs 5,700 crore and Rs 1,060 crore, respectively. Ebitda margin to remain stable at 18.6 per cent. We estimate net profit at Rs 220 crore, down 32 percent QoQ, as the previous quarter benefited from negative effective tax rate,” it said.

Indus Towers Q1 results preview
Indus Towers’ rental per tenant is likely to rise 0.1 per cent QoQ to Rs 41,477, partly driven by higher loading revenue on 5G rollout and rise in single tenancy towers, which is offsetting the adverse impact from equalisation/renewal.

“Rental revenue may rise 1.2 per cent QoQ (6.9 per cent YoY) to Rs 4,600 crore. We expect Ebitda to decline 6.2 per cent QoQ (up 9.7 per cent YoY) to Rs 3,800 crore, as the previous quarter benefited from a provision reversal. We expect net profit to drop 12.6 per cent QoQ (up 20.2 per cent YoY) to Rs 1,600 crore. BusinessToday

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