Telecom Q3 Results Preview: Revenue May Rise, Margin Expansion Capped By 5G Spends
Vodafone Idea's net loss for October to December quarter is anticipated to reduce to Rs 7,287 crore.
The Indian telecom sector is likely to witness revenue growth in the third quarter, aided by subscriber additions and expansion. But margin expansion will remain capped by 5G-related costs.
Bharti Airtel Ltd. is likely to see revenue growth of 3.5% sequentially to Rs 38,338 crore, according to consensus analyst estimates tracked by Bloomberg. The margin is likely to remain flat at 52%, with a 36% growth in net profit at Rs 2,854 crore.
The beleaguered Vodafone Idea is likely to see a revenue growth of 2% to Rs 10,957, according to Bloomberg. The margin is expected to contract to 38.6%, compared with 39.9% in the previous quarter. The net loss for the October–December quarter is anticipated to narrow to Rs 7,287 crore from Rs 8,737.9 crore in the second quarter.
However, similar estimates for Reliance Industries-owned Jio Infocomm aren't available; Prabhudas Lilladhar expected it to report revenue and Ebitda 4.1% and 7.1% higher on a sequential basis at Rs 25,760 crore and Rs 13,860 crore, respectively.
"We have also factored in ARPU of Rs 184.9 (+2% QoQ) and subscriber addition of Rs 96 lakh in Q2," it said in a note.
The brokerage also said that it has factored in "delayed tariff hikes" and built in average revenue per user of Rs 225/236 for FY25/26 for Bharti Airtel and Jio.
Airtel Africa’s performance may be hindered by African currency devaluation, but the underlying constant currency growth is likely to be healthy, ICICI Securities said.
Reliance Jio’s subscriber growth is expected to be elevated with a likely 1 crore net add; however, ARPU growth may be restricted by the adoption of unlimited data by 5G users, it said.
Telecom companies are likely to hike tariffs by 15-20% post-general elections, Piyush Pandey, vice president, institutional equity research for IT, telecom and internet at Yes Securities, told NDTV Profit. He anticipates Airtel taking the lead.
The Reliance subsidiary has spent over Rs 38,000 crore, primarily towards 5G rollout, while Airtel’s second quarter spending on capex was over Rs 7,700 crore.
Jio and Airtel are likely to witness a moderation in capital expenditure on 5G by the end of this fiscal aiding margins.
