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ICICI Securities Report
Our Q4 FY23E estimates suggest a deceleration in mobile revenue growth QoQ across telcos due to two less days during the quarter, and absence of tariff hikes. Subscriber base for Bharti Airtel Ltd. and Reliance Jio is likely to expand while that for Vodafone Idea Ltd. will most likely continue to shrink.
We expect mobile revenue for Airtel and RJio to rise 0.8% and 1.8% QoQ respectively in Q4 FY23E. RJio has grabbed higher incremental revenue probably as it gains subs as Bharti Airtel has increased its base plan price to Rs 155 (from Rs 99). We expect Vodafone Idea's revenue to dip 1% QoQ.
Ebitda margin expansion is likely to be limited, or decline, due to rise in network operating cost owing to 5G deployment (which means higher loading charges and more power consumption).
We expect Indus Towers Ltd.'s performance to be aided by rise in tenancy net adds and higher 5G loading; its Ebitda is likely to benefit from the absence of any provision for doubtful debts related to Vodafone Idea receivables.
Tata Communications Ltd. may report steady revenue growth (up 2.3% QoQ) in its data business on easing supply-chain issues and stable segmental margins QoQ. Key things to watch will be capex, free cash flow generation and net debt levels.
We expect Bharti Airtel to likely call for the second tranche of payment from its rights issue.
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