Q4 earnings: Jio set for steady growth on last tariff hike, customer additions

The telecom operator, along with its parent Reliance Industries Ltd, will announce its fourth quarter results for 2024-25 on 25 April.

Reliance Jio’s standalone revenue from operations is expected to grow 2% sequentially and 15% annually to ₹29,900 crore, the average of five brokerage estimates. This compares to the tariff-hike-led 3.4% sequential growth in the December quarter.

The company’s net profit is expected to grow 2.3% on-quarter and 24% on-year to about ₹6,600 crore, the average of four brokerage estimates.

“Telcos announced tariff hikes in July 2024, which boosted Arpu (average revenue per user) in the previous two quarters. Some residual benefit should show in Q4FY25 for RJio (Reliance Jio), but for two lesser days,” analysts at ICICI Securities said in a recent note. 

“Subscriber net addition has normalised in mobile, and acceleration may be visible in FWA (fixed wireless access), particularly for Reliance Jio,” the analysts added.

Arpu estimates

Arpu, which is a key metric, shows how much money a telecom operator makes on average from each customer per month. For Reliance Jio, the average of four brokerage estimates for Arpu stands at ₹205.7, up 1.3% sequentially. The growth in Arpu is aided by the staggered impact of the tariff hike despite a shorter quarter.

Analysts estimate that the company added 5 million subscribers during the quarter, bringing the base to around 487 million. The company had added 3.3 million subscribers in the preceding quarter.

In the December quarter earnings release, the company said the customer addition has rebounded to pre-tariff hike levels in the exit month after transient SIM card consolidation—the trend where users reduce the number of SIM cards they use, often due to tariff hikes.

“Strong traction in FTTH (fibre-to-the-home)/FWA is likely to continue with the addition of 2 million subscribers in 4QFY25,” brokerage house JM Financial said. 

As of January end, out of 5.72 million 5G FWA subscribers, Jio had 4.8 million users, followed by Bharti Airtel with 872,308, according to data from the Telecom Regulatory Authority of India (Trai).

FWA uses 5G networks to provide fast, reliable internet to homes and businesses without needing fibre or cables.

Ebitda estimates

Analysts expect Jio’s earnings before interest, taxes, depreciation and amortisation (Ebitda) to grow 2% on-quarter to ₹15,800 crore owing to the impact of tariff hikes. “Ebitda margin is expected to improve by 42 basis points sequentially to 53.2%,” analysts at Centrum said.

ICICI Securities estimates the company’s data volume will grow 2.3% on-quarter and 16.3% on-year to around 47.5 billion gigabytes.