Telecom Services on the growth track
Introduction of segmented tariff hikes introduced by Bharti would help in rise in revenue with steady margin whereas Jio's growth will be led by continued subscriber growth in 2Q.Bharti Airtel/Reliance Jio's mobile revenue growth to pick up QoQ to 5-7%.Subscriber and ARPU trends for Bharti and Jio may go inversely to each other. This is because Bharti achieve sharp ARPU increase with subscriber declines whereas Jio experience strong subscriber additions with steady ARPUs. Although margins may remain steady.
Indus may come up with profit growth due to margin expansion and higher exit penalties. Indian mobile revenues to grow in 2QFY22 due tariff hikes in the prepaid voice and corporate postpaid segments that were effective from August.subscribers may decline as there is a rise in minimum tariffs in prepaid voice segment. India mobile margins are likely to be up due to revenue growth.
Subscribers inflow to Reliance Jio
According to Jeffreys Reliance Jio would report a revenue growth. subscribers additions would happen due to JioPhone. But ARPUs are likely to rise due to extra day in 2Q. So Profits are likely to rise.Importangs things to watch are the duration and the dates for further tariff hikes.
Bharti with a positive outlook
Although Govt's recent moves favours the chances of Vodafone Idea's survival, it may not be able to to shift the market share from Vodafone Idea towards Bharti Airtel and Reliance Jio. This along with Bharti's hikes in July should keep revenue growth strong over the near to medium term. According to Jeffreys Bharti Airtel's market share may rise by 340bps to 39% in FY22-24, , driving a CAGR of 16/20% in its India mobile revenues and EBITDA.
Indus Towers to move along steady throughout the quarter
Core rental revenues are expected to grow due to tenancy growth along with this EBITDA margins also may increase 200bps YoY resulting in 11% YoY growth in EBITDA. Profit also may increase by 21% YoY due to higher exit penalties when compared to that of 2QFY21. Tenancy growth and scale up of alternative revenue streams must be closely watched.
Telecom industry is gaining the momentum in India.It would be a great idea to invest in these stocks with thorough research and due diligations so that we can make our investment decisions wisely.
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