Telecom - Q2FY21 Result Preview - ICICI Securities

We expect both subscriber and ARPUs to remain firm in an otherwise seasonally weak quarter given a) return of migrants to cities, b) continued higher data usage and thereby pack upgrades and c) improved availability of recharges both digitally/physically as cities/towns have largely restarted post lockdowns. For Bharti Airtel (Airtel), we bake in subscriber addition of ~3 million (mn), while for Vodafone Idea (VIL), we expect sub loss of ~3 mn (much lower than average churn of ~10 mn seen in the last four quarters). For Airtel, reported ARPU is likely to see ~2% QoQ growth at Rs. 160. Indian wireless revenues are expected to see 2.6% QoQ growth at Rs. 13,213 crore. For Vodafone Idea, with ARPU growth of ~3% QoQ at Rs. 117, we expect overall revenues to grow 0.9% QoQ at Rs. 10,753 crore.

Stable Q2 for TCom; STL to witness weak quarter

Tata Communication (TCom) is likely to report a stable performance. Overall revenue is expected to grow 1.3% QoQ (4.4% YoY) at Rs. 4459 crore driven by 2.8% QoQ (~9% YoY) data segment topline while voice business is expected to decline ~5.4% QoQ (down 13.5% YoY). Overall margins are expected at 23% (down 70 bps QoQ as Q1 had one-off costs benefits). Sterlite Tech (STL) is expected to witness the impact of weak product demand as well as some Covid-19 impact on services segment execution resulting in 19%, 31% decline in topline, EBITDA, respectively. PAT is expected to decline ~60% YoY given the incremental depreciation and interest of new capacity.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Telecom_Q2FY21.pdf

Source : Equity Bulls

Keywords