IGI Logo

Muted quarter for telcos!

Post the IUC impact in Q4FY21, Q1FY22 was marked by the second wave led lockdown (impacting subscriber addition) and extension of validity for bottom of the pyramid customers, which will restrict ARPUs. For Bharti Airtel (Airtel), we bake in subscriber addition of ~2 million (mn), while for Vodafone Idea (VIL), we expect subscriber loss of ~4 mn (vs. ~2 mn in Q4). For Airtel, reported ARPU is likely to be flattish QoQ at | 145. Indian wireless revenues are expected to be flattish at | 14,085 crore. For Vodafone Idea, with ARPU decline of ~3% QoQ at | 104, we expect overall revenues to decline 4% QoQ at | 9216 crore.

Margins to decline sharply for VIL

For Airtel, we expect India EBITDA margins at 49%, flattish QoQ. Africa margins are expected to be stable QoQ at 47.5%. Reported consolidated EBITDA is expected at | 12,620 crore, up 2.3% QoQ with margins expected at 48.3%, up 40 bps QoQ. For Airtel, we expect net profit of | 392 crore. For Vodafone Idea, we expect margins at 41.6%, down 430 bps QoQ, as Q4FY21 had one off costs benefit of ~| 450 crore. The company is expected to post a net loss of | 6674 crore.

Indus Towers to report modest growth

Indus Towers is likely to report muted number during the quarter. We bake in tower and net tenancy addition of 2330 and 2910, respectively. We expect merged entity rental revenues at | 4212 crore, up 1.7% QoQ. Energy revenues are expected to be up 5.6% QoQ (on a like to like basis) at | 2483 crore, driven by higher diesel prices. Overall margins are expected at 52.1%, down 50 bps QoQ given the higher share of energy revenues.

Flattish quarter for TCom; STL to report weak QoQ numbers

For Tata Communications (TCom), owing to continued delays in closure of transformation deals and tapering down of UCC traffic, we expect data revenue growth to be restricted. The data business (including subsidiaries) is expected to post 2% QoQ topline growth at | 3584 crore. The overall revenue is expected to grow 0.5% QoQ at | 4096 crore. Data segment margins are expected at 27.5% (down 40 bps QoQ) but up 50 bps YoY. Overall margins are expected at 24.8% (down 10 bps QoQ). Sterlite Tech (STL) is expected to report topline decline of 9% at | 1348 crore owing to Covid second wave impact on services segment execution. Consolidated EBITDA is expected to grow 10.6% QoQ at | 229 crore while EBITDA margins for the quarter are expected to decline 40 bps QOQ to 17%. Reported PAT at | 91.4 crore is expected to be down 27% QoQ driven by weak operating performance sequentially.

To Read Complete Report & Disclaimer Click Here

https://secure.icicidirect.com/Content/StaticData/Disclaimer.html

Above views are of the author and not of the website kindly read disclaimer