Telecom Q3 results preview: Another healthy quarter likely led by residual flow-through tariff hike

Telecom Q3FY25 Results Preview: Telecom companies are expected to report firm revenue and EBITDA growth for the third quarter of the financial year 2024-25, suggests brokerages. Domestic brokerage JM Financial, in its latest note, forecasts Jio, Bharti Airtel, Bharti Hexacom, and Vodafone Idea to achieve EBITDA growth of 4-6% QoQ, driven by the continued pass-through of the tariff hike to their ARPU. JM Financial expects Jio’s ARPU to rise by 4.5% QoQ to ₹204 but predicts a net subscription loss of 1.5 million, resulting in revenue and EBITDA growth of 3.1% and 4.9% QoQ, respectively. JM Financial expects Airtel's ARPU to improve by 4.7% QoQ to ₹244 in Q3FY25, driven by the residual pass-through of the July 2024 tariff hike, upgrades, and an improved subscriber mix. Airtel remains JM Financial top pick Bharti Airtel remains the brokerage's top pick with an unchanged one-year target price of ₹1,850 and a three-year price target of ₹2,400 apiece as it anticipates a structural uptrend in industry ARPU given the consolidated industry structure and higher ARPU requirement for Jio to justify significant 5G capex and its potential IPO.