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Time of India
13-05-2025
- Business
- Time of India
Addition of mobile users slows as tariff hikes pinch
Mumbai: Telecom tariff increases in July 2024 have caused the pace of subscriber additions to slow in rural India, a geography that hitherto led urban markets in drawing more India added a net 790,000 subscribers in the 12 months preceding March 25, a miniscule gain as compared with the 15.27 million added in the previous fiscal year, showed an analysis by the Telecom Regulatory Authority of India (Trai).'This is largely due to SIM consolidation after the tariff hikes as many rural households cut down on multi-SIMs and new connections,' said Balaji Subramanian, vice-president, IIFL Securities. 'We expect a correction in rural net adds as both Airtel and Jio will continue to enhance rural rollouts in coming quarters,' he added. The trend was similar for urban regions, albeit with a narrower gap. In FY25, urban circles gained 730,000 telecom subscribers compared with a net addition of 11.67 million in the previous fiscal. As of March '25, total rural and urban user bases stood at 534.69 million and 666.11 million respectively, Trai data showed. Notably, teledensity, a measure of the number of telecom users per 100 people in a geographic area, has shrunk for urban India - to 131.45% from 133.72%. This means that an average urban user who has more than one SIM card is cutting down, the decision swayed by telecom packs becoming more expensive. 'Irrespective of the regional diversity, India's total broadband user base has reached 944.12 million, and getting the next 100 million users is going to be very challenging,' said a senior telecom executive. 'This is mainly because, for a very large rural population, even a Rs 1000 annual spend on a mobile device and recharge is unaffordable.' 'But, we see a huge headroom for growth in rural markets as teledensity is at 59%. Lately, the refurbished smartphones market is burgeoning in these regions and even 5G FWA-based home connections are growing in tandem with urban numbers,' the executive added. According to Trai, the share of urban and rural wireless (5G FWA) subscribers was 62.97% and 37.03%, respectively at the end of March 2025. 'This is significant, because FWA home connections are three-times more expensive than mobile packs. This shows immense appetite for data-hungry users in these markets,' he said. He also noted that the gender divide of mobile ownership in India is reducing, meaning women will be leading growth contributors as new mobile owners going forward. According to the GSMA Mobile Gender Gap report 2024, India's mobile internet gender gap reduced from 40% to 30% as more women users came online. Prominent rural hotspots in Uttar Pradesh, Bihar, Karnataka are also consuming higher levels of data, though affordability is a concern as a large 2G user base has still not upgraded to higher revenue generating 4G/5G services, experts said.
Bloomberg
29-04-2025
- Business
- Bloomberg
KKR-Backed InCred Is Said to Be in Talks With Advisers on $470 Million IPO
Indian lending firm InCred Financial Services is in talks with potential advisers for an initial public offering to raise about 40 billion rupees ($470 million), people familiar with the matter said. The Mumbai-headquartered company, a partner of KKR & Co., is in discussions with firms including IIFL Securities, Kotak Mahindra Bank Ltd. and Nomura Holdings Inc. about working on an IPO, the people said, asking not to be identified because the information isn't public.
Time of India
28-04-2025
- Business
- Time of India
Analysts cut Reliance Jio valuation on revenue growth, cost concerns
KOLKATA: Analysts have cut Reliance Jio 's enterprise valuation (EV) to $111 billion from $117 billion on concerns of lower revenue flow-through from the next tariff hike - likely in late-2025 - and higher costs. Jio has underperformed second-ranked Bharti Airtel in converting the July 2024 mobile tariff hikes into revenues, according to the analysts. The telecom market leader's mobile revenue growth since the headline rate hikes is estimated at a peak of 13%, trailing Airtel's 17%. "We cut Jio's Ebitda estimates for FY26/27 by 3%/6% due to sustained increase in sales & distribution (S&D) costs and lower flow-through from the next tariff hike, assumed in late-2025. Consequently, we cut Jio's EV from $117 billion to $111 billion," IIFL Securities said in a research note seen by ET. The brokerage added that Jio recorded an estimated 10.7% mobile revenue growth since the July tariff hikes. "After factoring in any future flow-through, Jio's benefit may be 13% versus Bharti's 17%," it added. This extra flow-through has been factored in as Jio's management expects a small uptick in the next two quarters from subscribers on longer-duration annual plans. On Friday, Jio reported a 24.5% on-year growth in net profit for the March quarter at Rs 6,642 crore. Revenue from operations rose 15.6% to Rs 30,018 crore. Average revenue per user (ARPU) grew 1.4% sequentially to Rs 206, which implies the full residual pass-through of the last tariff hike has not happened even after three quarters. ICICI Securities said Jio faced "higher inflation across cost items", restricting Ebitda margin expansion. In Q4FY25, the telco's Ebitda margin stood at 52.8%, unchanged sequentially. Jio's network costs rose 6.9% on-year to Rs 8,400 crore, while selling, general & administrative (SG&A) expenses increased nearly 42% on-year to Rs 1,980 crore. Employee costs and access charges rose 4.3% and 132% on-year to Rs 504 crore and Rs 494 crore respectively. Interest costs too surged 34% on-year to Rs 1,346 crore as interest on 5G spectrum started reflecting in the company's P&L, it added. "...and the cost may continue to rise, driven by the commercial launch of 5G services and increased rollout of its JioFiber (home broadband) service that would help charge more fibre rental cost to the P&L," ICICI Securities said. IIFL Securities added that Jio's S&D costs jumped 7.3% sequentially to Rs 1,013 crore in Q4FY25 as the telecom industry continues to incentivise MNP (mobile number portability) through elevated channel payouts. "A more aggressive Vodafone Idea (Vi) and no tariff hike from state-run BSNL are also likely playing a role in the battle for subscriber acquisitions." To be sure, analysts expect monetisation of 5G services as a potential "sweet spot" for Jio since the telco has a dominant share of 5G subscribers in India.
Time of India
27-04-2025
- Business
- Time of India
Analysts cut Reliance Jio valuation on revenue growth, cost concerns
ICICI Securities said Jio faced "higher inflation across cost items", restricting Ebitda margin expansion. In Q4FY25, the telco's Ebitda margin stood at 52.8%, unchanged sequentially. Jio's network costs rose 6.9% on-year to Rs 8,400 crore, while selling, general & administrative (SG&A) expenses increased nearly 42% on-year to Rs 1,980 crore. Employee costs and access charges rose 4.3% and 132% on-year to Rs 504 crore and Rs 494 crore respectively. Interest costs too surged 34% on-year to Rs 1,346 crore as interest on 5G spectrum started reflecting in the company's P&L, it added. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads KOLKATA: Analysts have cut Reliance Jio 's enterprise valuation (EV) to $111 billion from $117 billion on concerns of lower revenue flow-through from the next tariff hike - likely in late-2025 - and higher has underperformed second-ranked Bharti Airtel in converting the July 2024 mobile tariff hikes into revenues, according to the analysts. The telecom market leader's mobile revenue growth since the headline rate hikes is estimated at a peak of 13%, trailing Airtel's 17%."We cut Jio's Ebitda estimates for FY26/27 by 3%/6% due to sustained increase in sales & distribution (S&D) costs and lower flow-through from the next tariff hike, assumed in late-2025. Consequently, we cut Jio's EV from $117 billion to $111 billion," IIFL Securities said in a research note seen by brokerage added that Jio recorded an estimated 10.7% mobile revenue growth since the July tariff hikes. "After factoring in any future flow-through, Jio's benefit may be 13% versus Bharti's 17%," it added. This extra flow-through has been factored in as Jio's management expects a small uptick in the next two quarters from subscribers on longer-duration annual Friday, Jio reported a 24.5% on-year growth in net profit for the March quarter at Rs 6,642 crore. Revenue from operations rose 15.6% to Rs 30,018 crore. Average revenue per user (ARPU) grew 1.4% sequentially to Rs 206, which implies the full residual pass-through of the last tariff hike has not happened even after three quarters. ICICI Securities said Jio faced "higher inflation across cost items", restricting Ebitda margin expansion. In Q4FY25, the telco's Ebitda margin stood at 52.8%, unchanged sequentially. Jio's network costs rose 6.9% on-year to Rs 8,400 crore, while selling, general & administrative (SG&A) expenses increased nearly 42% on-year to Rs 1,980 crore. Employee costs and access charges rose 4.3% and 132% on-year to Rs 504 crore and Rs 494 crore respectively. Interest costs too surged 34% on-year to Rs 1,346 crore as interest on 5G spectrum started reflecting in the company's P&L, it added."...and the cost may continue to rise, driven by the commercial launch of 5G services and increased rollout of its JioFiber (home broadband) service that would help charge more fibre rental cost to the P&L," ICICI Securities said. IIFL Securities added that Jio's S&D costs jumped 7.3% sequentially to Rs 1,013 crore in Q4FY25 as the telecom industry continues to incentivise MNP (mobile number portability) through elevated channel payouts. "A more aggressive Vodafone Idea (Vi) and no tariff hike from state-run BSNL are also likely playing a role in the battle for subscriber acquisitions." To be sure, analysts expect monetisation of 5G services as a potential "sweet spot" for Jio since the telco has a dominant share of 5G subscribers in India.
Reuters
31-01-2025
- Business
- Reuters
Derivatives data signals relief rally for Indian stocks, brokerages say
Jan 31 (Reuters) - After a punishing few months, India's benchmark NSE Nifty 50 index (.NSEI), opens new tab is poised for a relief rally in February, based on the changes in investors' positioning in the derivatives markets, brokerages said. The Nifty has tumbled 11.3% over the last four monthly derivatives series, each of which spans between the last Thursdays of a month, with the most recent one ending on Jan. 30. However, about 81% of the total Nifty futures at the end of the January series was rolled over into the February series, based on National Stock Exchange data, higher than the average of 77% in the previous three series. That indicates traders' willingness to build on their current positions, leading to likely stability in the markets. The Nifty has dropped about 0.8% so far in January, poised to finish lower for the fourth month in a row in its longest monthly losing streak in 23 years. It has tumbled 9.2% in the past four months, a drop that derivatives data had indicated was possible. This time around, the data is more encouraging. At the end of the January series, the addition in open interest (OI), or the total number of active unsettled futures contracts, was the highest in the financial services and information technology index futures, according to Nuvama Alternative and Quantitative Research. This implies potential higher activity in their underlying securities due to the availability of more buyers and sellers and is crucial since these two sectors have a combined weightage of about 50% among the 13 major indexes. Another encouraging sign was the positioning of foreign portfolio investors (FPIs), whose total outflows of $20.5 billion in the past four months have been instrumental in the Nifty's decline. While FPIs added Nifty index shorts in the January series, they reduced short positions in index futures in the last six sessions, raising expectations that their outflows might slow down. Overall, investors' positioning in derivatives markets at the start of the February series signals the scope for a relief rally, according to Nuvama and IIFL Securities. However, there are two important events that could help decide the market's path -- the annual budget on Saturday, Feb. 1 and the Reserve Bank of India's policy decision next Friday. The RBI's mega liquidity infusion package that kicked off on Thursday has raised hopes of an interest rate cut. "Any budgetary support to complement the central bank's measures to inject liquidity in the banking system is likely to cheer the markets," said Sriram Velayudhan of IIFL Securities. Nuvama said that a growth-focussed budget could trigger FPI short-covering in derivatives contracts in financials, leading to an immediate market rally.
