First Quarter of FY22 Is Expected to Be Muted One for Telecom Firms: Icicidirect

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Icicidirect

With wireless revenues expected to be flattish at Rs 14,085 crore, the first quarter of this financial year is expected to be a muted period for telecom firms. Post the Interconnect Usage Charges (IUC) impact in the fourth quarter of the previous financial year; the reporting quarter is marked by the second wave-led lockdown, which impacted subscriber additions. Further, an extension of validity for the bottom of the pyramid customers will also restrict ARPUs, according to a report by Icicidirect.

ARPUs or average revenue per user is a metric to gauge the financial metric of a telecom company. For Vodafone Idea (VIL), with an ARPU decline of about 3 per cent quarter-on-quarter (QoQ) at Rs 104, the overall revenues are expected to fall 4 per cent QoQ at Rs 9,216 crore. The subscriber addition for Bharti Airtel is expected to be about 2 million, and for VIL would be a loss of about 4 million, the report said.

For Bharti Airtel, India EBITDA margins would be flattish at 49 per cent on a QoQ basis. Africa margins are expected to be stable at 47.5 per cent, while consolidated EBITDA is expected at Rs 12,620 crore, up 2.3 per cent QoQ with margins expected at 48.3 per cent, up 40 basis points (bps).

For Airtel, the net profit is expected to be about Rs 392 crore. For VIL, the margins would be at 41.6 per cent, down 430 bps QoQ, as the fourth quarter had one-off costs benefit of Rs 450 crore. The company is expected to post a net loss of Rs 6,674 crore.

Modest Growth for Indus Towers

Indus Towers is likely to report a muted number during the quarter. “We bake in the tower and net tenancy addition of 2,330 and 2,910, respectively. We expect merged entity rental revenues at Rs 4,212 crore, up 1.7 per cent QoQ,” it said. Energy revenues are expected to be up 5.6 per cent QoQ (on a like to like basis) at Rs 2,483 crore, driven by higher diesel prices. Overall margins are expected at 52.1 per cent, down 50 bps QoQ given the higher share of energy revenues.

Flattish Quarter for TCom

For Tata Communications (TCom), owing to continued delays in the closure of transformation deals and tapering down of UCC traffic, the data revenue growth would be restricted. The data business (including subsidiaries) is expected to post 2% QoQ top-line growth at Rs 3,584 crore. The overall revenue is expected to grow 0.5 per cent QoQ at Rs 4,096 crore.

Data segment margins are expected at 27.5 per cent (down 40 bps QoQ) but up 50 bps YoY. Overall margins are expected at 24.8 per cent (down 10 bps QoQ).

Sterlite Tech (STL) is expected to report a top-line decline of 9 per cent at Rs 1,348 crore owing to Covid second wave impact on services segment execution. Consolidated EBITDA is expected to grow 10.6 per cent QoQ at Rs 229 crore, while EBITDA margins for the quarter are expected to decline 40 bps QOQ to 17 per cent.

The company is expected to post a net profit of Rs 91.4 crore, down 27 per cent on a QoQ basis, driven by weak operating performance, it added.

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