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Our Q1FY24E estimates suggest a good quarter for Bharti Airtel (Bharti), aided by strong ARPU growth of 2.9% QoQ to Rs199, and continued strong performance for non-mobile segment. Airtel Africa’s performance may be hindered by Nigerian currency devaluation, while underlying growth is likely to be healthy. Reliance Jio’s (RJio) subs growth to accelerate with likely 9mn net add; however, ARPU growth may be restricted by the adoption of unlimited data by 5G users. We expect cost inflation to be moderate for Bharti, RJio as they capitalise the initial 5G-related operating cost. VIL may see EBITDA dip despite revenue growth due to normalisation of network opex and inflation. Tata Communications’ (TCom) underlying data performance may be good with 2.5% QoQ growth, while reported growth is likely to have revenue from The Switch merger (estimated Rs1bn). Data EBITDA margin to dip 70bps QoQ due to higher operating cost and only break- even for The Switch. Indus Towers’ tenancy adds to be strong (+3,500) led by Bharti’s rural 4G rollout; we estimate nil provisioning for receivables from VIL.

* Bharti to lead ARPU growth in Q1FY24E. Bharti’s ARPU to grow 2.9% QoQ to Rs199 aided by premiumisation (2G to 4G, and strong add in postpaid), additional day and price hike in minimum recharge plan. RJio’s ARPU to grow 0.5% QoQ to Rs180 which was negatively impacted in Q1FY24E by higher 5G unlimited plan adoption. VIL’s ARPU to rise 0.5% QoQ to Rs137. RJio to see acceleration in subs add, up 9mn (+2% QoQ) while Bharti subs add to be muted at 2mn (impacted by pan-India rollout of higher minimum recharge) and VIL’s subs loss to be 1.7mn. Bharti’s data subs addition may be steady at 6mn, while VIL to report data subs dip.

* Bharti’s consolidated EBITDA to rise 1.8% QoQ (15.2% YoY) to Rs190bn. We expect Bharti’s India revenue to rise 3.4% QoQ (12% YoY) to Rs263bn led by mobile segment (+3.7% QoQ / 11.3% YoY). Its India EBITDA is likely to grow 4.6% QoQ (+18% YoY) to Rs140bn. Bharti Africa’s US$ revenue may fall 4% QoQ and EBITDA may dip 5.1% QoQ to US$1,287mn and US$622mn, respectively due to Nigerian currency’s devaluation. Consolidated revenue is likely to be up 1.2% QoQ to Rs364bn and EBITDA may be up 1.8% to Rs190bn. Net profit seen at Rs24bn (down 22% QoQ) – impacted by higher forex losses (though it is difficult to estimate the exact impact) and higher taxes.

* VIL’s EBITDA to dip 1.3% QoQ to Rs42bn. We expect VIL’s revenue to rise 0.5% QoQ to Rs106bn, despite sub losses, aided by ARPU growth on rise in penetration of unlimited plans. We expect EBITDA to fall 1.3% QoQ on higher operating cost (had one-offs in previous quarter); net loss at Rs77bn (nil tax rebate).

* RJio’ EBITDA is likely to rise 2.5% QoQ. RJio’s Q1FY24E revenue is estimated to rise 2.3% QoQ to Rs239bn, benefiting from sub adds, while ARPU expansion is limited. EBITDA may grow 2.5% QoQ to Rs125bn while cost continues to rise. Net profit is seen at Rs48bn, up 2.2% QoQ.

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