Telcos Reliance Jio and Bharti may post a 5-7 per cent sequential rise in revenue with a steady margin for the second quarter of FY22, according to Jefferies.
Bharti's growth will be led by segmented tariff hikes taken in the second quarter ended September, while Jio's growth will be driven by continued subscriber growth, it further said.
Jefferies expects the outlook on tariff hikes for Bharti, further details on JioPhone Next for Jio, and tenancy outlook for Indus Towers to be the key things to watch for in the September quarter.
"While the government's recent moves improve the chances of Vodafone Idea's survival, it is unlikely to arrest the market share shift from Vodafone Idea towards Bharti Airtel and Reliance Jio," Jefferies' note said.
This, along with, Bharti's hikes in July should keep revenue growth strong over the near to medium term.
"For 2QFY22, we expect Reliance Jio and Bharti to report 5-7 per cent quarter-on-quarter rise in revenue with steady margin," it wrote.
Overall, growth will likely see a pickup, Jefferies said in its preview report for Q2 FY22.
"During 2QFY22, we expect Bharti Airtel/Reliance Jio's mobile revenue growth to pick up Quarter on Quarter (QoQ) to 5-7 per cent," it said.
Subscriber and average revenue per user (ARPU) trends for Bharti and Jio are likely to be opposing with Bharti seeing a sharp ARPU increase with subscriber declines, and Jio witnessing strong subscriber additions with steady ARPUs, it said, pointing out that margins are likely to remain steady.
Elaborating on Bharti, Jefferies said it expects India mobile revenues to grow by an estimated seven per cent quarter-on-quarter in Q2 FY22, led by seven per cent growth in ARPU to Rs 157 on the back of tariff hikes in the prepaid voice and corporate postpaid segments that were effective from August.
Its Africa revenues are seen up 3 per cent sequentially in dollar terms.
The key focus areas for Bharti's results will be ARPUs, the timing of further tariff hikes and Capex outlay.
Jefferies report further said Reliance Jio may report a 4.7 per cent revenue growth, quarter-on-quarter.
It expected strong subscriber additions led by the mobile segment due to the JioPhone.
"However, ARPUs are likely to rise by a modest 1 per cent QoQ to Rs 140 due to extra day in 2Q," Jefferies report said, adding that further details on JioPhone Next and timing of further tariff hikes will be key monitorables.
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