JM Financial expects telecom companies to post modest sequential growth in average revenue per user (ARPU) and revenue in the September quarter, depsite the ongoing subscriber upgrades and an extra day in the quarter. Ahead of the quarterly earnings, the domestic brokerage retained its ‘Buy’ rating on Bharti Airtel (target price: Rs 2,240), Bharti Hexacom (target price: Rs 2,000), and Tata Communications (target price: Rs 2,000).
JM Financial maintained its positive view on Reliance Jio due to an expected 13 per cent CAGR in wireless ARPU over the next 3–5 years, supported by tariff hikes, premiumisation, and 5G adoption. Vodafone Idea’s rating has been upgraded to ‘Add’ from ‘Hold’, with a target of Rs 9.50, reflecting potential AGR relief. Indus Towers is downgraded to ‘Reduce’ from ‘Hold’ with a target price of Rs 340. the brokerage said.
Jio’s ARPU is anticipated to rise 1.1 per cent QoQ to around Rs 211, with subscriber gains of 70 lakh, driving revenue and Ebitda growth of 2.4 per cent and 2.5 per cent QoQ, respectively. Bharti Airtel is projected to see 2 per cent QoQ growth in India wireless revenue and 2.1 per cent QoQ growth in Ebitda, led by strong mobile broadband subscriber additions (72 lakh) and a 1.6 per cent QoQ ARPU improvement to Rs 254.
Bharti Hexacom is likely to report 2 per cent QoQ growth in wireless Ebitda on the back of healthy MBB subscriber additions (7 lakh) and a 1.6 per cent QoQ ARPU increase to Rs 250, JM Financial said.
Vodafone Idea’s revenue, reported Ebitda, and cash Ebitda are expected to grow 0.8 per cent, 1.1 per cent, and 0.9 per cent QoQ, respectively, as ARPU improves 1.2 per cent QoQ to Rs 167. This could be partly offset by a net subscriber loss of 5 lakh million, though MBB subscribers may increase by around 10 lakh, JM said.
Indus Towers is projected to see healthy net tenancy additions (6,100 in 2QFY26 vs 5,800 in 1QFY26), driven by Bharti’s rural expansion and Vodafone Idea’s network rollouts. While average rental per tenancy could decline 0.3 per cent QoQ due to sharing discounts on second tenancies, reported EBITDA may grow 0.3 per cent QoQ, with adjusted Ebitda rising 2.4 per cent QoQ after accounting for past dues recovery. Bharti Hexacom’s digital portfolio is expected to support.
Tata Communications is seen reporting revenue and Ebitda growth of 1.2 per cent and 1.8 per cent QoQ, though core connectivity may be impacted by recoverability issues in the SAARC region. BusinessToday