Vodafone Idea’s March quarter revenue is expected to decline sequentially as it continues to lose subscribers, even as bigger rival Bharti Airtel remains on the growth track, analysts have said as earnings season gets underway.
Analysts estimate Vodafone Idea’s March revenue to fall between 1 percent and 2 percent but expect the pace of losses to slow as network coverage improves. They expect its 4G subscriber base to continue to grow on the back of network rollout.
“With an improving network coverage, we expect VIL’s pace of net subscriber losses to slow down to 3 million in 4Q vs 5.1mn/5.2mn in 2Q/3Q. We believe that VIL is still some point away from showing positive net adds,” BoFA Securities said in a note.
It expects average revenue per user (ARPU) to remain flat, resulting in a 2.1 percent sequential revenue decline.
“We expect Vodafone Idea to report a 1.2 percent quarter-on-quarter decline and 3.5 percent year-on-year growth in revenue for Q4FY25, bringing it to around Rs 110 billion (approx. $1.33 billion). The drop is attributed to ongoing subscriber losses,” ICICI Securities said. ARPU will likely remain flat despite two fewer days in the quarter.
Despite these pressures, analysts said Vi’s 4G user base is likely to grow gradually, as its network rollout began in November.
ICICI Securities foresees a 5.2 percent decline in EBITDA for the quarter, affected by revenue pressure and an increase in expenses due to network expansion. But for the year, earnings before interest, taxes, depreciation and amortisation are expected to see a growth of 3.1 percent at Rs 44.7 billion (approx. $538 million).
The company’s net loss is estimated at Rs 76 billion (approximately $916 million), with no tax rebate considered.
Bharti Airtel
Bharti Airtel is likely to report a minor sequential dip in India mobile services revenue after 15 straight quarters of growth amid slower customer adds, fewer days in the quarter and also because it reaped full benefits of the rate hike in the previous quarter itself.
"Our Q4FY25 estimates point to a mobile services revenue dip for Airtel (down 0.1 percent on-quarter) and Vi (down 1.2 percent on-quarter). But Jio's revenue could grow at 2 percent sequentially," ICICI Securities said in a note.
It forecasts Airtel’s India revenue to grow 8.7 percent QoQ and 38 percent YoY at Rs 398 billion (approx. $4.8 billion).
India EBITDA is expected to edge up 0.1 percent QoQ on a like-for-like basis and surge 57.5 percent YoY to Rs 240 billion (approx. $2.89 billion).
BoFA also expects strong underlying business fundamentals for Airtel, forecasting a 2.5 percent QoQ increase in India's cellular revenues.
“We expect 4Q revenues to be impacted by Bharti exiting low-margin commodity wholesale voice business, partly offset by the whole 3 months consolidation of Indus Towers revenues, leading to a 13.7 percent QoQ rise in revenues,” the brokerage said.
Morgan Stanley expects Bharti Airtel to add 4 million subscribers and ARPU of Rs 246 in the March quarter. For the core India business (excluding passive infrastructure), revenue is likely to grow 0.2 percent QoQ and 16 percent YoY.
“The decline in the enterprise business partially impacts this as the company is exiting low-margin businesses, which would have impacted numbers for part of the quarter,” Morgan Stanley said in a note.
It expects India EBITDA to rise a percent for the quarter and 8.6 percent YoY. “We expect higher dividend payout in F25 vs F24, outlook for capex numbers in F26 to be lower than F25 and reaffirmation of balancing capital allocation towards lowering debt and paying back to shareholders,” the note added.
At 12.20 pm, the Vodafone Idea stock was trading at Rs 7.11 on the National Stock Exchange, up 0.28 percent from the previous close. Bharti Airtel was up 2.4 percent at Rs 1,756.40
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
