Expect Airtel, Bharti Infratel, Tata Communications to post lacklustre Q3 results: Kotak

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26 Aug, 2025 12:21

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Earnings by telecom companies are expected to be unexciting for another quarter amid pricing pressure and falling customer base due to competition, analysts said.

In fact, the sector has been disrupted for two years now especially after the big new entrant in the segment—Jio.

Kotak Institutional Equities expects flattish sequential consolidated revenues and EBITDA (earnings before interest, tax, depreciation and amortisation) for Bharti with an uptick in EBITDA from Africa and India enterprise business, which will make up for the decline in India wireless EBITDA.

In case of Bharti Infratel, the research house sees 4.4 percent sequential decline in EBITDA as the full-quarter impact of Vodafone-Idea tenancy exits reflects in financials. Whereas for Tata Communications, it said there could be flattish sequential EBITDA as an uptick in traditional data EBITDA compensates for voice segment decline.

Bharti Airtel

At a consolidated level, Kotak expects Bharti to report flat revenues and a 0.8 percent sequential decline in EBITDA.

The company is likely to report a loss of Rs 990 crore for the quarter, it said.

For the domestic wireless business, the research house expects a modest 1 percent QoQ decline in revenues, which is largely on account of lower intra circle roaming (ICR) revenues as it expects stable consumer-level revenues. The year-on-year decline in revenues could be 5.6 percent.

Kotak said revenue decline in the postpaid segment is likely to be compensated by some uptick on the low-end prepaid front thanks to the recently launched minimum spend construct. The full-quarter benefit of this move will likely reflect only Q4FY19 onwards, it feels.

According to the brokerage, cost pressures during the quarter are likely to be lower than seen in Q2FY19, but there could still be a modest increase in costs. Coupled with revenue decline, this would result in sequential EBITDA dip of 6.4 percent, it said.

Kotak expects 1-2 percent sequential improvement in revenues and EBITDA for Africa wireless, sharp sequential dip in EBITDA for the homes business and decent quarter for the India enterprise and DTH businesses.

Bharti Infratel

For Bharti Infratel, the telecom tower infrastructure services provider, the research house expects sequential EOP tenancy increase of 4.2 percent driven by Bharti Airtel and Reliance Jio. "We are baking in zero exits for the quarter."

"Long-term evolution (LTE) rollouts continue to drive solid growth in loading revenues for Bharti Infratel; these revenues show up as higher rental per tenant," said Kotak which expects the usual seasonal strength in energy spreads to continue.

In Q3, overall revenues are likely to decline by half a percent QoQ, service revenues by 5.3 percent, EBITDA by 4.4 percent and profit by 5.4 percent, according to the research house.

Tata Communications

Kotak said Q3 is a seasonally weak quarter on the revenues front for Tata Communications. "We estimate a sequential revenue decline of 4 percent. We expect flattish EBITDA, however, on the back of improved margins in the traditional data business."

According to the brokerage, voice segment will likely see a sharp sequential decline in EBITDA.

On the growth services front, upfront costs on a couple of large deals are likely to reflect in some sequential deterioration in EBITDA, it said.

Disclaimer: Reliance Industries Ltd, which owns Jio, is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.