Reliance Jio, the telecom arm of Reliance Industries Limited, is expected to continue benefitting from the July 2024 tariff hikes in the fiscal fourth quarter, unlike peers Bharti Airtel and Vodafone Idea, analysts said while giving Q4FY25 growth estimates for the telecom sector.
The telecom market leader is likely to add around four million subscribers, though the positive impact of subscriber additions and tariff hike flowthroughs is expected to be partially offset by 2 fewer days in the quarter, they added.
According to the average of estimates from five brokerages, Jio’s subscriber base is expected to come in at 488 million at the end of the March 2025 quarter, and ARPU at Rs 204.76. It’s subscriber base at the end of the third quarter of FY25 was 482 million, and ARPY was Rs 203.
“Since JIO has a higher proportion of customers on longer-duration plans, we estimate ARPU to grow 0.5% qoq, despite two fewer days in 4Q,” analysts from IIFL observed.
Analysts from ICICI Securities in their preview report said that the telco’s ARPU may grow as much as 1.2% quarter-on-quarter, since it has a higher mix of long validity and the tariff hike benefit is staggered over three quarters, as has been observed in previous tariff hikes.
Jio’s revenue is expected to see 1.8-2% sequential growth in the fourth quarter, buoyed by residual flow through of tariff hike and growth in fixed broadband driven by its fixed wireless access (FWA) offerings.
“Strong traction is FTTH (fibre-to-the-home) is likely to continue with the addition of 2 million subscribers,” analysts from JM Financial said.
Jio’s earnings before interest, taxation, depreciation and amortisation (EBITDA) is expected to rise between 2% to 3% sequentially. “EBITDA margin is likely to be stable QoQ as RJio has cost inflation on the back of rise in rentals for fibre,” analysts from ICICI Securities added.
Net profit for the quarter is anticipated to grow to around Rs 6700 crore (Q3: Rs 6477 crore), average estimates said.