Telecom industry second-quarter performance preview: Centrum expects telecom companies’ ARPU to grow 7-8% quarter-on-quarter; Bharti Airtel ranks among the top picks

Telecom Industry Second Quarter Performance Preview: Centrum Broking’s FY2025 second quarter performance preview report predicts that the average revenue per user (ARPU) of the three major telecom operators will increase by 7-8% quarter-on-quarter due to recent tariff increases. Reliance Jio and Airtel’s subscriber base is expected to remain flat quarter-on-quarter due to recent tariff hikes. Data usage per customer is expected to remain strong, driven by the increasing popularity of mobile internet. Investors are eagerly awaiting the progress of Reliance Jio and Airtel in implementing 5G in India.

In the telecom space, Bharti Airtel is the top choice among brokerages, with its business growth driven by continued growth in subscriber base and ARPU, as well as market share gained from Vodafone Idea. The company is expected to maintain industry-leading ARPU due to its superior customer portfolio.

The brokerage noted that the pricing situation has improved as now only three major players remain, apart from one smaller player. This positive change is clearly reflected in the recent price hikes announced by the three major telecom companies, indicating that companies are turning to higher ARPU to improve overall return on capital employed (ROCE).

In addition, Centrum Broking emphasized that increasing digital penetration will enhance the overall performance of Internet companies. The epidemic has accelerated the market share growth of Internet companies and placed greater emphasis on improving profitability. The brokerage said Emudhra’s growth remains strong on the back of expansion of its corporate business in the US and Europe.

Let’s review the key points from the brokerage’s second-quarter fiscal 2025 preview.

Reliance Jio

ARPU increased by 7.5% month-on-month $As a result of the latest price hike, Reliance Jio expects to add 1 million monthly users to 491 million. This would mean revenue growth of 8.5% sequentially.

Airtel

Bharti Airtel is likely to lose about 1 million customers quarter-on-quarter, taking the number of users to 354 million, with ARPU growing 8% quarter-on-quarter to 354 million. $228/month (industry-leading ARPU), driven by recent rate increases and continued consumer migration from 2G to 4G. With strong support from other business units, revenue is expected to increase by approximately 6.0% sequentially.

Vodafone Concept

The ongoing shift from 2G to 4G technology and the recent rate hike are expected to drive Vodafone Idea’s ARPU growth, which is expected to reach $156/month, a month-on-month decrease of 3.5 million customers. The biggest thing to watch is management’s commentary on its current capital spending activity.

Nazara Technologies expects revenue growth of more than 20% sequentially and EBITDA margin growth of more than 12%, helped by recent acquisitions.

map i india

With widespread development across all categories driving high teen revenue growth, MapmyIndia expects to post consecutive high teen revenue growth of 41.2% EBITDA margin. Key here are management’s comments about its B2C and international expansion ambitions.

emudra

Emudhra expects revenue to grow 20% from the previous period, driven by the acquisition of Two95 and expansion of corporate operations in key markets in the United States and Europe. EBITDA margin is expected to be approximately 31%.

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